Apparatus and method for performing authentication processing during device initialization. In accordance with some embodiments, a data storage device has a main memory which stores user data from a host, and a controller with initialization programming stored in a boot memory. The initialization programming is executed by the controller to transition the data storage device from an inactive state to a normal operational mode. During a bootstrap mode, the controller generates a first authentication token, receives a second authentication token responsive to the first authentication token, and authorizes use of new system programming responsive to the second authentication token. The new system programming is stored in a local memory of the data storage device and executed by the controller during the normal operational mode.