A hierarchical key generation and distribution mechanism for a computer system in which devices are organized into secure enclaves. The mechanism enables network access to be tailored to approximate minimum needed privileges for each device. At the lowest level of the hierarchy, keys are used to form security associations between devices. Keys at each level of the hierarchy are generated from keys at a higher level of the hierarchy and key derivation information. Key derivation information is readily ascertainable, either from identifiers for devices or from within messages, supporting hardware offload of cryptographic functions. Because keys may be generated based on the enclaves in which the hosts participating in a security association are located, the system includes a mechanism by which devices can discover the enclave in which they are located.