An encryption system is disclosed which is based on channel destination addresses for a time division multiple access (TDMA) satellite communications network. A superframe initialization vector is transmitted from a master station to all other stations in the network. A plurality of frame initialization vectors is sequentially generated at each station in an encryption engine, from the superframe initialization vector, using a key which is common only to authorized users within the network. Each data channel is initialized with encryption bits produced by exclusive ORing the channel destination address and the frame initialization vector for the frame in which that channel is to be transmitted, and then passing the output of the exclusive OR through the encryption engine using either the same key or a second, different key. These encryption bits are combined with the channel data in an exclusive OR circuit for TDMA transmission via the satellite transponder to the receiving stations. The decryption process at the receiving stations parallels the encryption process at the transmitting stations, so that clear-text data is output only at the destination addressed where the intended recipient has the same key as the transmitter. The system enables the synchronization of encryption engines at separate, geographically remote stations and permits the decryption of encrypted channels at anytime within a TDMA frame.