Data security plays an increasingly important role in modern telecommunications. The advent of quantum computational processors presents a significant threat to today's widely employed public key encryption algorithms, necessitating the adoption of new approaches to data encryption. Whilst quantum key distribution guarantees unconditional security for cryptographic key exchange in optical communication networks, the data rate is slow (Mbit/s), especially when compared to conventional optical

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... munication. Here we present a highly secure encryption approach in which the encryption key, generated by quantum key distribution at a rate of up to 2.9 Mbit/s, was used to seed physical layer encryption performed using time domain spectral phase encoding (TDSPE). This allowed us to demonstrate encrypted 40 Gbit/s quadrature phase shift keyed data communications over 52.3 km of installed optical fiber, which cannot be eavesdropped using brute force computational attacks. Any attempt to eavesdrop the encrypted signal in the physical layer is highly time-sensitive - the phase states must be measured and decrypted prior to optical signal attenuation, which means that the attack procedure typically needs to be completed within a few milliseconds. This work represents the first example of quantum-enhanced physical layer encryption at realistic optical data rates that is fully secure from brute force computational attacks and the first demonstration of TDSPE using continuous-wave laser source and quadrature phase shift key modulation.