Kerberos is a network authentication protocol & is designed to provide strong authentication for client/server applications by using secret-key cryptography. Our research was aimed at enhancing the security of transactions over a network. In this study, we used Kerberos Encryption Technique for authentication and transaction security in the network. Further, we created an Authentication Server that used to derive a 64 bit key from user s password. This password was of arbitrary length. The generated key then was used by authentication server, to encrypt ticket granting ticket + session key. The key generated by authentication server was then used by the client at the time of transaction through the transaction server to validate an authentic transaction. However, there was an issue of cross-validation of the ticket by the transaction server for which we included a database and encryption of all the text sent by any client to the transaction server. In this work we tried to implement authentication and transaction security in a Network using Kerberos. This project is embedded with Authentication Server application and used to derive a 64 bit key from user s password.