Many companies are ignoring the fact that they have multiple copies of same file with them, which is consuming a fair amount of space on their device. Those spaces can be reduced with the help of Data Deduplication. Data Deduplication refers to the process of eliminating the copies of repeating data. This project includes the generation of hash keys in a tree like structure to compare the hash index for each file in the given directory. It is more efficient to compare the hash key than the original file because hash keys are smaller than the original files. The binary-tree searching process keeps the keys in sorted order and traverses from root node to their leaves. The tree is recursively searched for duplicate files. If there exist no duplicate files, the tree is given a null index value. File security plays an important role in protecting the information of a user from any outsiders. The use of AES algorithm provides a secure method of file encryption. The 256-bit encryption process in implemented where a public key is used in order to encrypt the file.