In Microsoft Office Outlook 2003, when you create a new Outlook Data file, also known as a Personal Store (.pst), there is an option to select an encryption level. The choices are No Encryption, Compressible Encryption (default), and High Encryption. These options have been removed for Office Outlook 2007.

To encrypt a .pst file where Outlook 2007 is in use, consider the Encrypting File System (EFS) or BitLocker Drive Encryption. The EFS can encrypt files, folders, or volumes, and is available on Windows XP Pro and Windows Vista Business and Ultimate editions. On Vista, BitLocker Drive Encryption supplements the EFS by encrypting entire volumes more securely.

To encrypt an Outlook 2007 .pst file using the EFS, navigate to the .pst file in Windows Explorer. Right-click the .pst file and select Properties. The Advanced button on the General tab exposes a check box option to Encrypt contents to secure data. Outlook is not responsible for encrypting or decrypting .pst files at this level, of course. Windows will take care of that. Outlook has enough to do.

Now should someone steal your laptop or gain access to your workstation, they won't be able to read the contents of the .pst file without your logon and the private key. A recovery agent can help where the private keys are not available. Keep in mind, if you reinstall Windows without having a backup of your private key or recovery agent key, your data may be forever inaccessible. This is so critical that Vista will launch a private key export wizard when you first encrypt a file or folder to ensure you are able to decrypt the file even if your original key is not available. There is more information on EFS at Microsoft’s TechNet site; check out Encrypting File System.