This post builds upon the information that I presented in my last blog entry about how to securely store personal information on your Mac. A disk image is a special kind of file. When a disk image file is opened, it makes the computer think that an actual disk, like a CD, has been physically inserted into the computer. Thus, a disk image file, or more simply a disk image, can be thought of as a virtual disk.

Here’s how to create and use a password-protected (encrypted) disk image in Mac OS X 10.4 and later.  Disk Utility was redesigned in OS X El Capitan (10.11) so these instructions have been updated accordingly.

1. Go to your Applications folder and open the Utilities folder.
2. Open the Disk Utility application.
3. Click the “New Image” button, or from the File menu choose New and then Blank Disk Image. (In macOS 10.11 or higher click on the File menu and choose New Image and then Blank Image

• Enter a name for your disk image file in the “Save As” field
• Change the save destination to either your Documents folder or your Desktop, whichever you prefer.
• Set Volume Name set to “Virtual Disk” (In OS X 10.6 and later the field is called “Name”, not “Volume Name”)
• Select a Volume Size for the image file. If you’re just going to store a few Word or Excel files in the disk image, then 10 or 20 MB should be large enough. (In OS X 10.6 40 MB is the smallest you can select.) You can choose any size you’d like by selecting “Custom” at the bottom. If you ever fill your disk image you can always create a larger one and move the files from the smaller disk image to the larger one.
• Leave the volume format set to “Mac OS X Extended (Journaled)” (In 10.6 and later the field is called “Format”, not “Volume Format”)
• Leave “Partitions” set to “No partition map”
• Leave the Image Format set to “read/write disk image”
• Set Encryption to “128-bit AES” if your Mac uses Mac OS X 10.4. Choose “256-bit AES” if your Mac uses Mac OS X 10.5 or later

Warning: If you forget the password to your encrypted disk image, your data will be irretrievably lost so please write down your password on a piece of paper. This is just a precautionary measure.

• Click the Create or Save button.
• Important: In this next step you’ll need to first uncheck “Remember password (add to keychain)” then enter the same strong password twice. This password is used to secure your disk image.  [By “strong password,” I mean one this is long and contains a mix of letter, numbers, odd capitalization and punctuation marks or at least most of these features. For example, 1%milKisgooDforyoU is a strong password.]
• Click OK

1. The disk image file will be created and then it’ll be opened automatically.
2. Look at your Desktop you should see an icon named Virtual Disk. This is what appears whenever your disk image is opened. Copy a file into this Virtual Disk. Notice that the file will automatically be copied when you put it in the Virtual Disk. The original file will remain where it is so you’ll probably want to put it into the Trash in a couple of days after you’re sure you understand how your new disk image works.
3. Close Virtual Disk by dragging its icon to the Trash, which will eject this virtual or fake disk.
4. Now, locate your disk image file. (It’s in the location that you selected in step 3, second bullet). Double-click your disk image file. Enter your password when prompted and then click the “OK” button. You should now see the icon for Virtual Disk again. Open it and you’ll see the file that you copied into it.
5. Now that you know how to use your disk image, you can copy more files into it and then delete the originals. For example, if you keep a list of passwords or other sensitive information in a Word or Excel file, copy this file into the secure disk image. Once you’ve confirmed that this file is inside your disk image then throw away the original file so it’s no longer sitting unprotected on your Mac’s hard drive.
6. Don’t leave your Virtual Disk on the Desktop all day long. This defeats the added security. Only open it when you need it and then close it when you’re done by dragging its icon to the Trash icon on your Dock.