How do you password protect an external USB drive on iMac, Mac OSX

How to create a secure USB drive with Apple Mac OSX

Mac OS Disk Utility

Select Mac OS Extended (Case-sensitive, Journaled, Encrypted) from the drop-down

Choose a password to encrypt the device - use a more cryptic hint!

Pop-up displayed when you insert an encrypted device

If you need to securely protect an external USB device, USB Hard drive (HDU), Compact Flash or other type of memory card with password protection, this function is available within Mac OSX.

Once you protect the device with a password you will not be able to access the data within unless you first enter the unlock password.

A drive protected in this fashion will not be readable on a Windows PC, with or without the password that you have chosen to encrypt the device.

Drive encryption process

Ensure you have backed up any data you need from this device as this erasing/ formatting this device will destroy all data contained within
Use Launchpad, (D), to select and launch Disk Utility
Select the root of the device

This is the top option on the device Generic USB CF Reader Media in this example

Click 'Erase'
Select 'Mac OS Extended (journaled, Encrypted)' from the drop-down menu

You could also select Mac OS Extended (Case-Disk, Journaled, Encrypted), should you prefer

Enter a new name for this device if you wish to change it from the existing value

'You can change the security method used to erase the device under Security Options, although this is only the method used to erase your current data and has no bearing upon future data stored on this device

Double-check you still have the correct device selected as the next step will irreversibly destroy any data on the selected drive
Click Erase
Once the operation is complete, eject the device and reconnect it to test that your protection is working

Notes

Don't lose the password as you will not be able to access this device without it
Always remove the secure device from your system when you leave your PC
The password is only requested when you first insert the device, once the device is inserted (mounted), anyone with access to your PC will be able to access the encrypted device
Do not select 'Remember the password in my keychain' when entering your password or it will always be accessible without entering the password on that PC
To un-encrypt the device (remove the password protection), use Disk Utility - You may have to repeat this process twice to return the format to MS-DOS FAT