What is Encrypting File System

The Encrypting File System is a complicated beast. Especially if you are in the unfortunate predicament of having to restore a file or files that have been encrypted. If you need an in-depth article on EFS then I highly recommend that you checkout this WikiPedia Article. Here is a brief extract: -

The Encrypting File System (EFS) on Microsoft Windows is a feature introduced in version 3.0 of NTFS that provides filesystem-level encryption. The technology enables files to be transparently encrypted to protect confidential data from attackers with physical access to the computer.

EFS is enabled in all versions of Windows meant for professional use from Windows 2000 onwards. However, since significant caveats exist for its use, no files are encrypted by default and must explicitly be invoked by the user (in organizational settings encryption can also be mandated through Group Policy).Read more.

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