A router based authentication system provides packet level authentication of incoming data packets and eliminates the risk of having data packets come in to the network whose source cannot be authenticated. In Router Based Authentication System (RBAS), a prior art router is adapted with an authentication function that works in conjunction with a security function in the client. Alternatively, a new router can be built that embeds an authentication function. The router based authentication function includes: (i) an ability to receive a telephone call and verify the caller by comparing with pre-stored caller id, (ii) generate a random alphanumeric code, deliver to the caller, and save in the system, (iii) reject all packets from the client that do not have a passkey embedded in the header of the packet. The security function in the client includes (i) display of an authentication screen that may display a telephone number to a border or internal router of a computer network of a business and enables entry of the passkey made up of the telephone number of the user and the alphanumeric code, and (ii) a function that encrypts the passkey and inserts the passkey in the header of each outgoing data packet to the business.