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Selecting the Scope and Level of Encryption

Updated: March 28, 2003

Applies To: Windows Server 2003, Windows Server 2003 R2, Windows Server 2003 with SP1, Windows Server 2003 with SP2

On a VPN, you protect your data by encrypting it between the VPN client and the VPN server. Always use data encryption for VPN connections when private data is sent across a public network, which always presents a risk of interception. For VPN connections, Windows Server 2003 uses MPPE for PPTP connections and IPSec encryption for L2TP connections.


  • Nonencrypted PPTP connections (over which the PPP frame is sent in plaintext) and nonencrypted non-IPSec-based L2TP connections (over which the PPP frame is sent in plaintext) are not secure, and they are not recommended for VPN connections over the Internet.

To ensure successful encryption and decryption, the sender and the receiver must use a common encryption key. The length of the encryption key is an important security parameter, especially over public networks. To ensure the highest level of encryption, use the largest key size.

Protection Provided by Link Encryption

In link encryption, data is encrypted only on the link between the VPN client and the VPN server. A VPN connection has link encryption, regardless of the VPN protocol in use. PPTP connections use MPPE with MS-CHAP, MS-CHAP v2, or EAP-TLS authentication. For L2TP/IPSec connections, IPSec provides encryption on the link between the VPN client and the VPN server.

When data encryption is performed between the VPN client and the VPN server, you do not need to encrypt the data on the communication link between a dial-up client and its ISP. For example, a mobile user might use a dial-up networking connection to dial in to a local ISP. After the Internet connection is made, the user creates a VPN connection with the enterprise VPN server. Because the VPN connection is encrypted, no encryption is needed on the dial-up networking connection between the user and the ISP.

Providing End-to-End Encryption

For an additional layer of security, configure end-to-end encryption. End-to-end encryption encrypts the data between the source host and the destination host. After a VPN connection is made, IPSec can be used to provide end-to-end encryption. For an L2TP/IPSec connection, IPSec end-to-end encryption is used in addition to IPSec link encryption.

Table 8.2 shows which authentication methods support specific encryption requirements.

Table 8.2   Encryption Support Provided Under CHAP, MS-CHAP, and EAP-TLS


Requirement Authentication Protocols Encryption Enforcement

Secured password with no data encryption


Optional encryption. (Connect even if no encryption.)

Secured password with MPPE data encryption


Required encryption. (Disconnect if server declines.)

Smart card with no data encryption


Optional encryption. (Connect even if no encryption.)

Smart card with data encryption


Require encryption. (Disconnect if server declines.)

Data encryption for L2TP connections relies on IPSec, which does not require any specific authentication protocol. IPSec enforces the encryption; if the server declines data encryption, the connection is denied.

The strength of link encryption is set through the remote access policies that govern PPTP and L2TP connections on the server. A remote access policy is a collection of conditions and settings that define authorization and access privileges for connection attempts. For IAS servers and servers running Routing and Remote Access, remote access policies are used to determine whether a connection attempt is accepted or rejected.

Table 8.3 shows the encryption support provided for PPTP and L2TP/IPSec connections by each level of encryption that is set in a remote access policy.

Table 8.3   Encryption Required at Each Encryption Level for PPTP and L2TP/IPSec Connections


Encryption Level PPTP Encryption Required L2TP Encryption Required

No Encryption

No encryption required.

No encryption required.


MPPE 40-bit data encryption

IPSec 56-bit Data Encryption Standard (DES)


MPPE 56-bit data encryption

IPSec 56-bit DES


MPPE 128-bit encryption

IPSec 168-bit Triple DES (3DES)

For a procedure for setting the encryption level in a remote access policy, see "Configuring authentication and data encryption" in Help and Support Center for Windows Server 2003. For more information about using Windows Server 2003 remote access policies, see "Introduction to remote access policies" in Help and Support Center for Windows Server 2003.

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