A hardware cryptosystem developed by the National Security Agency as part of the US Government's failed attempts at imposing nationwide key escrow, along with the Capstone chip. It included the NSA-designed Skipjack block cipher and utilized a key exchange protocol similar to the one used by Kerberos (i.e. the Needham-Schroeder Protocol), modified to provide for key escrow. This is simpler than the Diffie-Hellman key exchange used by Capstone. It had a data encryption rate of 15-20 MB/second after key exchange, could be programmed to use a specific set of keys with the proper equipment, and designed to be resistant to reverse engineering even by sophisticated opponents.

The only significant application that ever used the Clipper chip were the AT&T commercial secure (yeah right!) voice products. It ultimately failed however, because of the availability of alternative strong cryptography without any kleptographic modifications.