diff --git a/crypto/crypto_utils.c b/crypto/crypto_utils.c
index 85b51ed..f154424 100644
--- a/crypto/crypto_utils.c
+++ b/crypto/crypto_utils.c
@@ -541,7 +541,7 @@ err0:
 }
 
 int
-get_pw_string(char pw[MAX_PW_LEN], char *prompt)
+get_pw_string(char pw[MAX_PW_LEN], char *prompt, int twice)
 {
 	int fd, len;
 	FILE *input, *strm;
@@ -575,22 +575,28 @@ get_pw_string(char pw[MAX_PW_LEN], char *prompt)
 		return (-1);
 	}
 
-	fprintf(stderr, "%s (once more): ", prompt);
-	fflush(stderr);
-	s = fgets(pw2, MAX_PW_LEN, input);
-	tcsetattr(fd, TCSANOW, &oldt);
-	fflush(strm);
-	fputs("\n", stderr);
+	if (twice) {
+		fprintf(stderr, "%s (once more): ", prompt);
+		fflush(stderr);
+		s = fgets(pw2, MAX_PW_LEN, input);
+		tcsetattr(fd, TCSANOW, &oldt);
+		fflush(strm);
+		fputs("\n", stderr);
 
-	if (s == NULL) {
-		return (-1);
-	}
+		if (s == NULL) {
+			return (-1);
+		}
 
-	if (strcmp(pw1, pw2) != 0) {
-		fprintf(stderr, "Passwords do not match!\n");
-		memset(pw1, 0, MAX_PW_LEN);
-		memset(pw2, 0, MAX_PW_LEN);
-		return (-1);
+		if (strcmp(pw1, pw2) != 0) {
+			fprintf(stderr, "Passwords do not match!\n");
+			memset(pw1, 0, MAX_PW_LEN);
+			memset(pw2, 0, MAX_PW_LEN);
+			return (-1);
+		}
+	} else {
+		tcsetattr(fd, TCSANOW, &oldt);
+		fflush(strm);
+		fputs("\n", stderr);
 	}
 
 	len = strlen(pw1);
diff --git a/crypto/crypto_utils.h b/crypto/crypto_utils.h
index 2fc6133..56469f5 100644
--- a/crypto/crypto_utils.h
+++ b/crypto/crypto_utils.h
@@ -85,7 +85,7 @@ int crypto_buf(crypto_ctx_t *cctx, uchar_t *from, uchar_t *to, ssize_t bytes, ui
 uint64_t crypto_nonce(crypto_ctx_t *cctx);
 void crypto_clean_pkey(crypto_ctx_t *cctx);
 void cleanup_crypto(crypto_ctx_t *cctx);
-int get_pw_string(char pw[MAX_PW_LEN], char *prompt);
+int get_pw_string(char pw[MAX_PW_LEN], char *prompt, int twice);
 
 /*
  * HMAC functions.
diff --git a/main.c b/main.c
index f724bf9..39591b3 100644
--- a/main.c
+++ b/main.c
@@ -292,6 +292,32 @@ redo:
 		goto cont;
 	}
 
+	/*
+	 * Verify HMAC first before anything else.
+	 */
+	if (encrypt_type) {
+		unsigned int len;
+
+		len = mac_bytes;
+		deserialize_checksum(checksum, tdat->compressed_chunk + cksum_bytes, mac_bytes);
+		memset(tdat->compressed_chunk + cksum_bytes, 0, mac_bytes);
+		hmac_reinit(&tdat->chunk_hmac);
+		hmac_update(&tdat->chunk_hmac, (uchar_t *)&tdat->len_cmp_be, sizeof (tdat->len_cmp_be));
+		hmac_update(&tdat->chunk_hmac, tdat->compressed_chunk,
+		    tdat->len_cmp + cksum_bytes + mac_bytes + CHUNK_FLAG_SZ);
+		hmac_final(&tdat->chunk_hmac, tdat->checksum, &len);
+		if (memcmp(checksum, tdat->checksum, len) != 0) {
+			/*
+			 * HMAC verification failure is fatal.
+			 */
+			fprintf(stderr, "Chunk %d, HMAC verification failed\n", tdat->id);
+			main_cancel = 1;
+			tdat->len_cmp = 0;
+			sem_post(&tdat->cmp_done_sem);
+			return;
+		}
+	}
+
 	cseg = tdat->compressed_chunk + cksum_bytes + mac_bytes;
 	_chunksize = tdat->chunksize;
 	deserialize_checksum(tdat->checksum, tdat->compressed_chunk, cksum_bytes);
@@ -644,7 +670,7 @@ start_decompress(const char *filename, const char *to_filename)
 
 		if (!pwd_file) {
 			pw_len = get_pw_string(pw,
-				"Please enter encryption password");
+				"Please enter decryption password", 0);
 			if (pw_len == -1) {
 				memset(salt2, 0, saltlen);
 				free(salt2);
@@ -680,6 +706,7 @@ start_decompress(const char *filename, const char *to_filename)
 				perror(" ");
 				memset(salt2, 0, saltlen);
 				free(salt2);
+				close(uncompfd); unlink(to_filename);
 				err_exit(0, "Failed to get password.\n");
 			}
 			close(fd);
@@ -690,6 +717,7 @@ start_decompress(const char *filename, const char *to_filename)
 			memset(salt2, 0, saltlen);
 			free(salt2);
 			memset(pw, 0, MAX_PW_LEN);
+			close(uncompfd); unlink(to_filename);
 			err_exit(0, "Failed to initialize crypto\n");
 		}
 		memset(salt2, 0, saltlen);
@@ -701,6 +729,7 @@ start_decompress(const char *filename, const char *to_filename)
 		 * Verify header HMAC.
 		 */
 		if (hmac_init(&hdr_mac, cksum, &crypto_ctx) == -1) {
+			close(uncompfd); unlink(to_filename);
 			err_exit(0, "Cannot initialize header hmac.\n");
 		}
 		hmac_update(&hdr_mac, (uchar_t *)algo, ALGO_SZ);
@@ -715,7 +744,8 @@ start_decompress(const char *filename, const char *to_filename)
 		hmac_final(&hdr_mac, hdr_hash1, &hlen);
 		hmac_cleanup(&hdr_mac);
 		if (memcmp(hdr_hash2, hdr_hash1, mac_bytes) != 0) {
-			err_exit(0, "Header verification failed! File tampered.\n");
+			close(uncompfd); unlink(to_filename);
+			err_exit(0, "Header verification failed! File tampered or wrong password.\n");
 		}
 	} else {
 		mac_bytes = 0;
@@ -768,6 +798,13 @@ start_decompress(const char *filename, const char *to_filename)
 		} else {
 			tdat->rctx = NULL;
 		}
+
+		if (encrypt_type) {
+			if (hmac_init(&tdat->chunk_hmac, cksum, &crypto_ctx) == -1) {
+				fprintf(stderr, "Cannot initialize chunk hmac.\n");
+				UNCOMP_BAIL;
+			}
+		}
 		if (pthread_create(&(tdat->thr), NULL, perform_decompress,
 		    (void *)tdat) != 0) {
 			perror("Error in thread creation: ");
@@ -776,6 +813,11 @@ start_decompress(const char *filename, const char *to_filename)
 	}
 	thread = 1;
 
+	if (encrypt_type) {
+		/* Erase encryption key bytes stored as a plain array. No longer reqd. */
+		crypto_clean_pkey(&crypto_ctx);
+	}
+
 	w.dary = dary;
 	w.wfd = uncompfd;
 	w.nprocs = nprocs;
@@ -816,6 +858,7 @@ start_decompress(const char *filename, const char *to_filename)
 					    "file corrupt\n", chunk_num);
 				UNCOMP_BAIL;
 			}
+			tdat->len_cmp_be = tdat->len_cmp; // Needed for HMAC
 			tdat->len_cmp = htonll(tdat->len_cmp);
 
 			/*
@@ -1069,7 +1112,7 @@ plain_compress:
 	 */
 	if (encrypt_type) {
 		/*
-		 * Encryption algorithm should not change the size and
+		 * Encryption algorithm must not change the size and
 		 * encryption is in-place.
 		 */
 		rv = crypto_buf(&crypto_ctx, compressed_chunk, compressed_chunk,
@@ -1120,6 +1163,22 @@ plain_compress:
 	 */
 	*(tdat->compressed_chunk) = type;
 
+	/*
+	 * If encrypting, compute HMAC for entire chunk (hdr + data)
+	 */
+	if (encrypt_type) {
+		uchar_t *mac_ptr;
+		unsigned int hlen;
+		uchar_t chash[mac_bytes];
+
+		/* Clean out mac_bytes to 0 for stable hash. */
+		mac_ptr = tdat->cmp_seg + sizeof (tdat->len_cmp) + cksum_bytes;
+		memset(mac_ptr, 0, mac_bytes);
+		hmac_reinit(&tdat->chunk_hmac);
+		hmac_update(&tdat->chunk_hmac, tdat->cmp_seg, tdat->len_cmp);
+		hmac_final(&tdat->chunk_hmac, chash, &hlen);
+		serialize_checksum(chash, mac_ptr, hlen);
+	}
 cont:
 	sem_post(&tdat->cmp_done_sem);
 	goto redo;
@@ -1232,7 +1291,7 @@ start_compress(const char *filename, uint64_t chunksize, int level)
 		compressed_chunksize += mac_bytes;
 		if (!pwd_file) {
 			pw_len = get_pw_string(pw,
-				"Please enter encryption password");
+				"Please enter encryption password", 1);
 			if (pw_len == -1) {
 				err_exit(1, "Failed to get password.\n");
 			}
@@ -1408,6 +1467,12 @@ start_compress(const char *filename, uint64_t chunksize, int level)
 			tdat->rctx = NULL;
 		}
 
+		if (encrypt_type) {
+			if (hmac_init(&tdat->chunk_hmac, cksum, &crypto_ctx) == -1) {
+				fprintf(stderr, "Cannot initialize chunk hmac.\n");
+				COMP_BAIL;
+			}
+		}
 		if (pthread_create(&(tdat->thr), NULL, perform_compress,
 		    (void *)tdat) != 0) {
 			perror("Error in thread creation: ");
@@ -1466,6 +1531,9 @@ start_compress(const char *filename, uint64_t chunksize, int level)
 		hmac_final(&hdr_mac, hdr_hash, &hlen);
 		hmac_cleanup(&hdr_mac);
 
+		/* Erase encryption key bytes stored as a plain array. No longer reqd. */
+		crypto_clean_pkey(&crypto_ctx);
+
 		pos = cread_buf;
 		*((int *)pos) = htonl(crypto_ctx.saltlen);
 		pos += sizeof (int);
@@ -1631,6 +1699,8 @@ comp_done:
 			sem_post(&tdat->start_sem);
 			sem_post(&tdat->cmp_done_sem);
 			pthread_join(tdat->thr, NULL);
+			if (encrypt_type)
+				hmac_cleanup(&tdat->chunk_hmac);
 		}
 		pthread_join(writer_thr, NULL);
 	}
diff --git a/pcompress.h b/pcompress.h
index 96e76fd..487f8a2 100644
--- a/pcompress.h
+++ b/pcompress.h
@@ -163,7 +163,7 @@ struct cmp_data {
 	dedupe_context_t *rctx;
 	ssize_t rbytes;
 	ssize_t chunksize;
-	ssize_t len_cmp;
+	ssize_t len_cmp, len_cmp_be;
 	uchar_t checksum[CKSUM_MAX_BYTES];
 	int level;
 	unsigned int id;
@@ -175,6 +175,7 @@ struct cmp_data {
 	sem_t write_done_sem;
 	void *data;
 	pthread_t thr;
+	mac_ctx_t chunk_hmac;
 };
 
 #ifdef	__cplusplus