A system and method for securing code segments and ensuring proper execution using state-based encryption is presented. A class loader captures a memory state snapshot and uses the memory state snapshot for generating a key that encrypts a class. The class loader subsequently captures additional memory state snapshots at specific execution cycle times, and uses the memory state snapshots to generate additional keys that encrypt subsequent code segments. The encrypted code segments are stored in a file that is distributed to client computers. The client computer decrypts the individual code segments using keys that are generated from client memory state snapshots. If a particular code segment is not loaded in order or has been altered, the code segment is not decrypted properly and the software program terminates.