We have demonstrated quantum key distribution (QKD) [1] over a 10-km, 1-airmass atmospheric range during daylight and at night. Secret random bit sequences of the quality required for the cryptographic keys used to initialize secure communications devices were transferred at practical rates with realistic security. By identifying the physical parameters LA-UR-02-449 using the "public channel" Alice reveals her basis choice for each bit of her raw key, but not the bit value. Bob communicates back the time slots of the bits in his raw key for which he used the same basis as Alice. In an ideal system Alice's transmitted bits and the results of Bob's measurements on this random, 50% portion of the raw key, known as the "sifted" key, are perfectly correlated; they discard the raw key bits for which Bob used the wrong basis. In practice Bob's sifted key contains errors. Fundamental quantum principles ensure that Eve is both limited in how much information she may obtain by eavesdropping on the quantum communications, and that she cannot do so without introducing a disturbance (errors) in Bob's sifted key from which Alice and Bob can deduce a rigorous upper bound on leaked information. Alice and Bob determine this bound after reconciling their sifted keys using post facto error correction [13] over their public channel, but at the price of leaking additional (side) information to Eve. From their partially-secret reconciled keys Alice and Bob extract the shorter, final secret key on which they agree with overwhelming probability and on which Eve's expected information is much less than one bit [14] after a final stage of "privacy amplification" [3] using further public channel communications. BB84 with ideal single-photon signals is unconditionally secure [15].

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