How to use the SysKey utility to secure the Windows Security Accounts Manager database

To Configure Windows System Key Protection, follow these steps:

At a command prompt, type syskey, and then press ENTER.
In the Securing the Windows Account Database dialog box, note that the Encryption Enabled option is selected and is the only option available. When this option is selected, Windows will always encrypt the SAM database.
Click Update.
Click Password Startup if you want to require a password to start Windows. Use a complex password that contains a combination of upper case and lower case letters, numbers, and symbols. The startup password must be at least 12 characters long and can be up to 128 characters long.

Note If you must remotely restart a computer that requires a password (if you use the Password Startup option), a person must be at the local console during the restart. Use this option only if a trusted security administrator will be available to type the Startup password.
Click System Generated Password if you do not want to require a startup password.

Select either of the following options:
Click Store Startup Key on Floppy Disk to store the system startup password on a floppy disk. This requires that someone insert the floppy disk to start the operating system.
Click Store Startup Key Locally to store the encryption key on the hard disk of the local computer. This is the default option.
Click OK two times to complete the procedure.

Remove the SAM encryption key from the local hard disk by using the Store Startup Key on Floppy Disk option for optimum security. This provides the highest level of protection for the SAM database.

Always create a back-up floppy disk if you use the Store Startup Key on Floppy Disk option. You can restart the system remotely if someone is available to insert the floppy disk into the computer when it restarts.

Note The Microsoft Windows NT 4.0 SAM database was not encrypted by default. You can encrypt the Windows NT 4.0 SAM database by using the SysKey utility.