diff --git a/lrzip.c b/lrzip.c
index 086c3a6..3fe651f 100644
--- a/lrzip.c
+++ b/lrzip.c
@@ -475,16 +475,16 @@ static void get_hash(rzip_control *control, int make_hash)
 
 	passphrase = calloc(PASS_LEN, 1);
 	testphrase = calloc(PASS_LEN, 1);
+	control->pass_hash = calloc(HASH_LEN, 1);
 	control->hash = calloc(HASH_LEN, 1);
 	control->hash_iv = calloc(SALT_LEN, 1);
-	control->rehash_iv = calloc(SALT_LEN, 1);
-	if (unlikely(!passphrase || !testphrase || !control->hash || !control->hash_iv || !control->rehash_iv))
+	if (unlikely(!passphrase || !testphrase || !control->pass_hash || !control->hash || !control->hash_iv))
 		fatal("Failed to calloc encrypt buffers in compress_file\n");
 	mlock(passphrase, PASS_LEN);
 	mlock(testphrase, PASS_LEN);
+	mlock(control->pass_hash, HASH_LEN);
 	mlock(control->hash, HASH_LEN);
 	mlock(control->hash_iv, SALT_LEN);
-	mlock(control->rehash_iv, SALT_LEN);
 
 	/* Disable stdin echo to screen */
 	tcgetattr(fileno(stdin), &termios_p);
@@ -510,25 +510,18 @@ retry_pass:
 	free(testphrase);
 
 	memcpy(passphrase + PASS_LEN - SALT_LEN, control->salt, SALT_LEN);
-	sha4(passphrase, PASS_LEN, passphrase, 0);
+	sha4(passphrase, PASS_LEN, control->pass_hash, 0);
 
 	print_maxverbose("Hashing passphrase %lld times\n", control->encloops);
 	for (i = 0; i < control->encloops; i++) {
 		for (j = 0; j < HASH_LEN; j++)
-			control->hash[j] ^= passphrase[j];
+			control->hash[j] ^= control->pass_hash[j];
 		sha4(control->hash, HASH_LEN, control->hash, 0);
 		if (unlikely(i == control->encloops - 1024)) {
 			for (j = 0; j < SALT_LEN; j++)
 				control->hash_iv[j] = control->hash[j];
 		}
 	}
-	memcpy(control->rehash_iv, control->hash_iv, SALT_LEN);
-
-	memset(control->hash + SALT_LEN, 0, HASH_LEN - SALT_LEN);
-	munlock(control->hash + SALT_LEN, HASH_LEN - SALT_LEN);
-	control->hash = realloc(control->hash, SALT_LEN);
-	if (unlikely(!control->hash))
-		fatal("Failed to realloc control->hash in get_hash\n");
 	memset(passphrase, 0, PASS_LEN);
 	munlock(passphrase, PASS_LEN);
 	free(passphrase);
@@ -536,13 +529,13 @@ retry_pass:
 
 static void release_hashes(rzip_control *control)
 {
+	memset(control->pass_hash, 0, HASH_LEN);
 	memset(control->hash, 0, SALT_LEN);
 	memset(control->hash_iv, 0, SALT_LEN);
-	memset(control->rehash_iv, 0, SALT_LEN);
 	munlockall();
+	free(control->pass_hash);
 	free(control->hash);
 	free(control->hash_iv);
-	free(control->rehash_iv);
 }
 
 /*
@@ -678,11 +671,8 @@ void decompress_file(rzip_control *control)
 		print_verbose("CRC32 ");
 	print_verbose("being used for integrity testing.\n");
 
-	if (ENCRYPT) {
+	if (ENCRYPT)
 		get_hash(control, 0);
-		if (unlikely(aes_setkey_dec(&control->aes_ctx, control->hash, 128)))
-			failure("Failed to aes_setkey_dec in decompress_file\n");
-	}
 
 	print_progress("Decompressing...\n");
 
@@ -876,8 +866,15 @@ next_chunk:
 		} while (last_head);
 		++stream;
 	}
-	if (unlikely((ofs = lseek(fd_in, c_len, SEEK_CUR)) == -1))
+
+	if (ENCRYPT) {
+		if (unlikely((ofs = lseek(fd_in, c_len + 8, SEEK_CUR)) == -1))
+			fatal("Failed to lseek c_len in get_fileinfo\n");
+	} else {
+		if (unlikely((ofs = lseek(fd_in, c_len, SEEK_CUR)) == -1))
 		fatal("Failed to lseek c_len in get_fileinfo\n");
+	}
+
 	/* Chunk byte entry */
 	if (control->major_version == 0 && control->minor_version > 4) {
 		if (unlikely(read(fd_in, &chunk_byte, 1) != 1))
@@ -969,11 +966,8 @@ void compress_file(rzip_control *control)
 	int fd_in, fd_out;
 	char header[MAGIC_LEN];
 
-	if (ENCRYPT) {
+	if (ENCRYPT)
 		get_hash(control, 1);
-		if (unlikely(aes_setkey_enc(&control->aes_ctx, control->hash, 128)))
-			failure("Failed to aes_setkey_enc in compress_file\n");
-	}
 	memset(header, 0, sizeof(header));
 
 	if (!STDIN) {
diff --git a/lrzip_private.h b/lrzip_private.h
index 58d6e6f..6be8dad 100644
--- a/lrzip_private.h
+++ b/lrzip_private.h
@@ -201,9 +201,9 @@ struct rzip_control {
 	i64 encloops;
 	i64 secs;
 	uchar salt[16];
+	uchar *pass_hash;
 	uchar *hash;
 	uchar *hash_iv;
-	uchar *rehash_iv;
 	aes_context aes_ctx;
 	unsigned char eof;
 	unsigned char magic_written;
diff --git a/runzip.c b/runzip.c
index 20d7f78..89dc0dc 100644
--- a/runzip.c
+++ b/runzip.c
@@ -377,7 +377,7 @@ i64 runzip_fd(rzip_control *control, int fd_in, int fd_out, int fd_hist, i64 exp
 			if (unlikely(read_1g(control, fd_in, md5_stored, MD5_DIGEST_SIZE) != MD5_DIGEST_SIZE))
 				fatal("Failed to read md5 data in runzip_fd\n");
 			if (ENCRYPT)
-				lrz_crypt(control, md5_stored, MD5_DIGEST_SIZE, 0, 1);
+				lrz_crypt(control, md5_stored, MD5_DIGEST_SIZE, control->hash_iv, 0);
 			for (i = 0; i < MD5_DIGEST_SIZE; i++)
 				if (md5_stored[i] != md5_resblock[i]) {
 					print_output("MD5 CHECK FAILED.\nStored:");
diff --git a/rzip.c b/rzip.c
index c9e031f..8f6025b 100644
--- a/rzip.c
+++ b/rzip.c
@@ -978,7 +978,7 @@ retry:
 	}
 	/* When encrypting data, we encrypt the MD5 value as well */
 	if (ENCRYPT)
-		lrz_crypt(control, md5_resblock, MD5_DIGEST_SIZE, 1, 1);
+		lrz_crypt(control, md5_resblock, MD5_DIGEST_SIZE, control->hash_iv, 1);
 	if (unlikely(write_1g(control, md5_resblock, MD5_DIGEST_SIZE) != MD5_DIGEST_SIZE))
 		fatal("Failed to write md5 in rzip_fd\n");
 
diff --git a/stream.c b/stream.c
index d08b005..059cedc 100644
--- a/stream.c
+++ b/stream.c
@@ -66,6 +66,7 @@ static struct compress_thread{
 	pthread_mutex_t mutex; /* This thread's mutex */
 	struct stream_info *sinfo;
 	int streamno;
+	uchar salt[16];
 } *cthread;
 
 static struct uncomp_thread{
@@ -1183,8 +1184,11 @@ retry:
 		get_rand(cti->s_buf + cti->c_len, MIN_SIZE - cti->c_len);
 	}
 
-	if (!ret && ENCRYPT)
-		lrz_crypt(control, cti->s_buf, padded_len, 1, 0);
+	if (!ret && ENCRYPT) {
+		get_rand(cti->salt, 8);
+		memcpy(cti->salt + 8, control->salt + 8, 8);
+		lrz_crypt(control, cti->s_buf, padded_len, cti->salt, 1);
+	}
 
 	/* If compression fails for whatever reason multithreaded, then wait
 	 * for the previous thread to finish, serialising the work to decrease
@@ -1254,8 +1258,14 @@ retry:
 	}
 	ctis->cur_pos += 25;
 
+	if (ENCRYPT) {
+		ctis->cur_pos += 8;
+		if (unlikely(write_buf(control, ctis->fd, cti->salt, 8)))
+			fatal("Failed to write_buf salt in compthread %d\n", i);
+	}
+
 	if (unlikely(write_buf(control, ctis->fd, cti->s_buf, padded_len)))
-		fatal("Failed to write_buf in compthread %d\n", i);
+		fatal("Failed to write_buf s_buf in compthread %d\n", i);
 
 	ctis->cur_pos += padded_len;
 	free(cti->s_buf);
@@ -1380,6 +1390,7 @@ static int fill_buffer(rzip_control *control, struct stream_info *sinfo, int str
 	struct stream *s = &sinfo->s[streamno];
 	stream_thread_struct *st;
 	uchar c_type, *s_buf;
+	uchar salt[16];
 
 	if (s->buf)
 		free(s->buf);
@@ -1419,6 +1430,14 @@ fill_another:
 		header_length = 25;
 	}
 
+	if (ENCRYPT) {
+		if (unlikely(read_buf(control, sinfo->fd, salt, 8))) {
+			print_err("Failed to read_buf salt in fill_buffer\n");
+			return -1;
+		}
+		memcpy(salt + 8, control->salt + 8, 8);
+	}
+
 	padded_len = MAX(c_len, MIN_SIZE);
 	fsync(control->fd_out);
 
@@ -1431,7 +1450,7 @@ fill_another:
 		return -1;
 
 	if (ENCRYPT)
-		lrz_crypt(control, s_buf, padded_len, 0, 0);
+		lrz_crypt(control, s_buf, padded_len, salt, 0);
 
 	ucthread[s->uthread_no].s_buf = s_buf;
 	ucthread[s->uthread_no].c_len = c_len;
diff --git a/util.c b/util.c
index 2fdce65..a272a74 100644
--- a/util.c
+++ b/util.c
@@ -160,23 +160,34 @@ static void xor128 (void *pa, const void *pb)
 	a [1] ^= b [1];
 }
 
-void lrz_crypt(rzip_control *control, uchar *buf, i64 len, int encrypt, int carry_iv)
+void lrz_crypt(rzip_control *control, uchar *buf, i64 len, uchar *salt, int encrypt)
 {
 	/* Encryption requires CBC_LEN blocks so we can use ciphertext
 	* stealing to not have to pad the block */
-	unsigned char ivec[CBC_LEN], tmp0[CBC_LEN], tmp1[CBC_LEN];
+	uchar ivec[80], tmp0[CBC_LEN], tmp1[CBC_LEN];
+	uchar key[80], iv[80];
 	i64 N, M;
+	int i;
+
+	/* Generate unique key and IV for each block of data based on salt */
+	mlock(key, 80);
+	mlock(iv, 80);
+	for (i = 0; i < 64; i++)
+		key[i] = control->pass_hash[i] ^ control->hash[i];
+	memcpy(key + 64, salt, 16);
+	sha4(key, 80, key, 0);
+	for (i = 0; i < 64; i++)
+		ivec[i] = key[i] ^ control->pass_hash[i];
+	memcpy(ivec + 64, salt, 16);
+	sha4(ivec, 80, ivec, 0);
 
-	mlock(ivec, CBC_LEN);
-	if (carry_iv)
-		memcpy(ivec, control->rehash_iv, CBC_LEN);
-	else
-		memcpy(ivec, control->hash_iv, CBC_LEN);
 	M = len % CBC_LEN;
 	N = len - M;
 
 	if (encrypt) {
 		print_maxverbose("Encrypting data        \n");
+		if (unlikely(aes_setkey_enc(&control->aes_ctx, key, 128)))
+			failure("Failed to aes_setkey_enc in lrz_crypt\n");
 		aes_crypt_cbc(&control->aes_ctx, AES_ENCRYPT, N, ivec, buf, buf);
 		
 		if (M) {
@@ -188,6 +199,8 @@ void lrz_crypt(rzip_control *control, uchar *buf, i64 len, int encrypt, int carr
 			memcpy(buf + N - CBC_LEN, tmp1, CBC_LEN);
 		}
 	} else {
+		if (unlikely(aes_setkey_dec(&control->aes_ctx, key, 128)))
+			failure("Failed to aes_setkey_dec in lrz_crypt\n");
 		print_maxverbose("Decrypting data        \n");
 		if (M) {
 			aes_crypt_cbc(&control->aes_ctx, AES_DECRYPT, N - CBC_LEN,
@@ -206,10 +219,9 @@ void lrz_crypt(rzip_control *control, uchar *buf, i64 len, int encrypt, int carr
 			aes_crypt_cbc(&control->aes_ctx, AES_DECRYPT, len,
 				      ivec, buf, buf);
 	}
-	/* The carry_iv flag tells us if we want to update the value in
-	 * control->rehash_iv for later encryption */
-	if (carry_iv)
-		memcpy(control->rehash_iv, ivec, CBC_LEN);
-	memset(ivec, 0, CBC_LEN);
-	munlock(ivec, CBC_LEN);
+
+	memset(ivec, 0, 80);
+	memset(key, 0, 80);
+	munlock(ivec, 80);
+	munlock(key, 80);
 }
\ No newline at end of file
diff --git a/util.h b/util.h
index c6c75f3..f74a677 100644
--- a/util.h
+++ b/util.h
@@ -29,6 +29,6 @@ void fatal(const char *format, ...);
 void failure(const char *format, ...);
 void round_to_page(i64 *size);
 void get_rand(uchar *buf, int len);
-void lrz_crypt(rzip_control *control, uchar *buf, i64 len, int encrypt, int carry_iv);
+void lrz_crypt(rzip_control *control, uchar *buf, i64 len, uchar *salt, int encrypt);
 
 #endif