The primary role of the transport layer is to facilitate safe and secure communication between the two hosts at the time of authentication and during subsequent communication. The transport layer accomplishes this by handling the encryption and decryption of data, and by providing integrity protection of data packets as they are sent and received. The transport layer also provides compression, speeding the transfer of information.

Once an SSH client contacts a server, key information is exchanged so that the two systems can correctly construct the transport layer. The following steps occur during this exchange:

During the key exchange, the server identifies itself to the client with a unique host key. If the client has never communicated with this particular server before, the server's host key is unknown to the client and it does not connect. OpenSSH gets around this problem by accepting the server's host key. This is done after the user is notified and has both accepted and verified the new host key. In subsequent connections, the server's host key is checked against the saved version on the client, providing confidence that the client is indeed communicating with the intended server. If, in the future, the host key no longer matches, the user must remove the client's saved version before a connection can occur.

SSH is designed to work with almost any kind of public key algorithm or encoding format. After an initial key exchange creates a hash value used for exchanges and a shared secret value, the two systems immediately begin calculating new keys and algorithms to protect authentication and future data sent over the connection.

After a certain amount of data has been transmitted using a given key and algorithm (the exact amount depends on the SSH implementation), another key exchange occurs, generating another set of hash values and a new shared secret value. Even if an attacker is able to determine the hash and shared secret value, this information is only useful for a limited period of time.

Once the transport layer has constructed a secure tunnel to pass information between the two systems, the server tells the client the different authentication methods supported, such as using a private key-encoded signature or typing a password. The client then tries to authenticate itself to the server using one of these supported methods.

SSH servers and clients can be configured to allow different types of authentication, which gives each side the optimal amount of control. The server can decide which encryption methods it supports based on its security model, and the client can choose the order of authentication methods to attempt from the available options.

After a successful authentication over the SSH transport layer, multiple channels are opened via a technique called multiplexing^[8]. Each of these channels handles communication for different terminal sessions and for forwarded X11 sessions.

Both clients and servers can create a new channel. Each channel is then assigned a different number on each end of the connection. When the client attempts to open a new channel, the clients sends the channel number along with the request. This information is stored by the server and is used to direct communication to that channel. This is done so that different types of sessions do not affect one another and so that when a given session ends, its channel can be closed without disrupting the primary SSH connection.

Channels also support flow-control, which allows them to send and receive data in an orderly fashion. In this way, data is not sent over the channel until the client receives a message that the channel is open.

The client and server negotiate the characteristics of each channel automatically, depending on the type of service the client requests and the way the user is connected to the network. This allows great flexibility in handling different types of remote connections without having to change the basic infrastructure of the protocol.