A locking digital pen system includes memory means which is available for storing user passwords for a plurality of users. When a user wishes to activate the digital pen, the user is enabled to use the digital pen to enter a password. After verification of the password, the pen is unlocked and the system associates the user with a matching digital signature certificate. When the user wishes to lock the pen, the user is enabled to actuate a button on the pen or provide an entry to a coupled computer to initiate a locking sequence. The system then disassociates the user from the digital signature certificates so the pen can no longer be used to digitally sign documents and the pen enters a locked state. In another embodiment, an authorized user may disable the unlocking function of the pen whereby the pen may not be unlocked by entry of a password but rather only when a special code is entered into the system.