I experienced this on a Windows Server 2003 Enterprise environment. In my case this was because the Encrypting File System’s File Recovery Certificate had expired. We had an additional issue in that the root CA that issued the certificate in the first place was no longer available. I issued a new certificate and added that to the Default Domain Policy, removed the expired one and then removed and re-added encryption to the directory. The procedure was as follows:
In Default Domain Policy drill down to: Computer Configuration -> Windows Settings -> Security Settings -> Public Key Policies -> Encrypting File System. Check the File Recovery Certificate Information. In our case it was expired.
1. From the host you want to encrypt data on connect to a Certificate Authority via https://yourcaserver/certsrv.
2. Request a certificate.
3. Advanced certificate request.
4. Create and submit a request to this CA.
5. Choose Basic EFS, leave all defaults, and submit.
6. Install the Certificate.
Go through 1 – 6 again but this time for EFS Recovery Agent. Open MMC and Snap-In the Certificates – Current User. Check personal Certificates and you will see the certificates you just installed. Right click on, and export the File Recovery cert.
In Default Domain Policy drill down to: Computer Configuration -> Windows Settings -> Security Settings -> Public Key Policies -> Encrypting File System. Right click on your expired cert and export it (for backup recovery purposes) and then delete it. Right click Encrypting File System, and add Data Recovery Agent, follow the wizard and browse to folders, choose the certificate file you exported from your personal Certificates and add it in.
Do a „gpupdate /force” for good measure and then disable and re-enable encryption on the failed directory.
The RA was defined in the Group Policy and had an expired certificate. Therefore, whenever an XP client would try to encrypt a folder they would receive an error regarding the invalid certificate. Rsop.msc showed the applied policy on the XP machine in question that had an expired cert. I was able to export the expired key pair and save it to CD for future use. From the reading I did while I worked on this issue, I should still be able to decrypt files that were created while it was valid.
What I did was to generate a new key pair using “cipher /r” on an XP machine and then added it to my group policy as my recovery agent. I had to remove the expired cert to get things working again, but once I did, the XP machines in question could encrypt folders and files again. Both the expired key pair and current key pair have been exported, saved to CDs, and placed in secure, safe locations.
From a newsgroup post: "Somewhere in your domain (or OU policy), you have a recovery agent certificate defined that expired. You can have multiple recovery agents defined at multiple levels. If anyone of them expires, users are prohibited from using EFS. Recovery agents are defined in the following way. Open group policy at appropriate level (OU, domain, etc) and under Computer Configuration expand Windows Settings -> Security Settings -> Public Key Policies -> Encrypting File System".