Design methodologies based on reuse of intellectual property (IP) components critically depend on techniques to protect IP ownership. IP protection is particularly challenging for hardware/software systems, where an IP core runs embedded software: both the software and the core are valuable IP that must be protected.We propose a new technique for protecting the IP of both processor cores and application software in hardware/software systems. Our approach is based on public-key cryptography and it has been implemented as a package in the JavaCAD distributed design and simulation environment [1].