Disclosed is an apparatus and method for generating a security key in a mobile communication system that performs security key generation. An Authentication, Authorization and Accounting (AAA) server generates a Master Session Key (MSK) and an Enhanced MSK (EMSK) from a Long Term Credential key, and a Device-MSK (D-MSK), a User-MSK (U-MSK) and a Device and User-MSK (DU-MSK) from the MSK and the EMSK. An Access Gateway (AG) generates a Root-MSK (R-MSK) from the MSK and EMSK received from the AAA server. A Signaling Radio Network Controller (SRNC) generates a Pairwise Master Key (PMK) from the R-MSK received from the AG, and a Traffic Session Key (TSK) from the PMK. A Base Station (BS) sets up a radio connection to a Mobile Station (MS) using the TSK received from the SRNC, and performs radio communication using the set radio connection. The MS generates an MSK and an EMSK, and generates there from a D-MSK, a U-MSK, a DU-MSK, an R-MSK, a PMK, an SRK and a TSK, to perform radio communication with the BS.