This paper explores computer security in pervasive computing with focus on user authentication. We present the concept of Proximity-Based User Authentication, as a usability-wise ideal for UbiComp systems. We present a context-aware user authentication protocol, which (1) uses a JavaCard for identification and cryptographic calculations, (2) uses a context-awareness system for verifying the user’s location, and (3) implements a security fall-back strategy. We analyze the security of this protocol and discuss the tradeoff between usability and security. We also present our current implementation of the protocol and discuss future work.