A portable storage device with encryption protection is provided, including a memory interface connected to a data access host for inputting decryption information from the data access host and for outputting to the data access host, an encryption promotion unit connected to the memory interface for recording the data protection status, at least an encryption control unit connected to the encryption promotion unit for identifying data encryption code or signal, and issuing enabling or disabling control signal, a protection gate unit connected to the encryption control unit and the memory interface for enabling or disabling the data transmission to the memory interface according to the control signal from encryption control unit, and at least a protected data region and invalid data region connected to protection gate unit for the protected data region to output data to data access host when protection gate unit being enabled, and for invalid data region to output invalid data to data access host when protection gate unit being disabled, so that the portable storage device can achieve the objects of accurate and permanently effective encryption.