KeePass stores your passwords securely in an encrypted file (database). This database is locked with a master password, a key file and/or the current Windows account details. To open a database, all key sources (password, key file, ...) are required. Together, these key sources form the Composite Master Key.
KeePass does not support keys being used alternatively, i.e. it's not possible that you can open your database using a password or a key file. Either use a password, a key file, or both at once (both required), but not interchangeably.
If you use a master password, you only have to remember one password or passphrase (which should be good!) to open your database. KeePass features protection against brute-force and dictionary attacks on the master password, read the security information page for more about this.
If you forget this master password, all your other passwords in the database are lost, too. There isn't any backdoor or a key which can open all databases. There is no way of recovering your passwords.
You don't even have to remember a long, complicated master passphrase. The database can also be locked using a key file. A key file is basically a master password in a file. Key files are typically stronger than master passwords, because the key can be a lot more complicated; however it's also harder to keep them secret.
Location. The point of a key file is that you have something to authenticate with (in contrast to master passwords, where you know something), for example a file on a USB stick. The key file content (i.e. the key data contained within the key file) needs to be kept secret. The point is not to keep the location of the key file secret selecting a file out of thousands existing on your hard disk basically doesn't increase security at all, because it's very easy for malware/attackers to find out the correct file (for example by observing the last access times of files, the recently used files list of Windows, malware scanner logs, etc.). Trying to keep the key file location secret is security by obscurity, i.e. not really effective.
File Type and Existing Files. KeePass can generate key files for you, however you can also use any other, already existing file (like JPG image, DOC document, etc.).
KeePass 1.x OnlyIn order to use an existing file as key file, click the button with the 'Save' image in the master key creation dialog and select the existing file. After accepting the dialog, KeePass will ask you whether to overwrite or reuse the file (see screenshot).
KeePass 2.x OnlyIn order to use an existing file as key file, click the 'Browse' button in the master key creation dialog.
Windows User Account
KeePass 1.x OnlyKeePass 1.x does not support encrypting databases using Windows user account credentials. Only 2.x and higher support this.
KeePass 2.x OnlyKeePass can make the database dependent on the current Windows user account. If you enable this option, you can only open the database when you are logged in as the same Windows user when creating the database.
Be very careful with using this option. If your Windows user account gets deleted, you won't be able to open your KeePass database anymore. Also, when using this option at home and your computer breaks (hard disk damaged), it is not enough to just create a new Windows account on the new installation with the same name and password; you need to copy the complete account (i.e. SID, ...). This is not a simple task, so if you don't know how to do this, it is highly recommended that you don't enable this option. Instructions on how to restore a backed up account can be found in a Microsoft TechNet article: How to recover a Vault corrupted by lost DPAPI keys.
You can change the password of the Windows user account freely; this does not affect the KeePass database. Note that changing the password (e.g. a user using the Control Panel or pressing Ctrl+Alt+Del and selecting 'Change Password') and resetting it to a new one (e.g. an administrator using a
If you decide to use this option, it is highly recommended not to rely on it exclusively, but to additionally use one of the other two options (password or key file).
Protection using user accounts is unsupported on Windows 98 / ME.
For Administrators: Specifying Minimum Properties of Master Keys
Administrators can specify a minimum length and/or the minimum estimated quality that master passwords must have in order to be accepted. You can tell KeePass to check these two minimum requirements by adding/editing appropriate definitions in the INI/XML configuration file.
KeePass 1.x OnlyThe value of the
The value of the
KeePass 2.x OnlyThe contents of the
The contents of the
For example, if you want to enforce using the user account option, you could check and disable the control (such that the user can't uncheck it anymore) by specifying 263168 as value (0x40000 + 0x400 = 0x40400 = 263168).