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FileVault secures your home folder by placing it completely inside an encrypted Disk image that mounts at login. Enabling or disabling FileVault requires that you temporarily have at least as much free space on your hard drive as your home folder takes up. You can set FileVault preferences in the Security preference pane of System Preferences.

FileVault first appeared with Panther.

FileVault 2

Lion includes FileVault 2. This version adds full disk encryption on internal drives as well as drives connected via USB and FireWire.