Most conventional network services use password-based authentication schemes. Such schemes require a user to authenticate to a given network server by supplying their username and password. Unfortunately, the transmission of authentication information for many services is unencrypted. For such a scheme to be secure, the network has to be inaccessible to outsiders, and all computers and users on the network must be trusted and trustworthy.

Even if this is the case, a network that is connected to the Internet can no longer be assumed to be secure. Any attacker who gains access to the network can use a simple packet analyzer, also known as a packet sniffer, to intercept usernames and passwords, compromising user accounts and the integrity of the entire security infrastructure.

The primary design goal of Kerberos is to eliminate the transmission of unencrypted passwords across the network. If used properly, Kerberos effectively eliminates the threat that packet sniffers would otherwise pose on a network.