Smart environments established by the development of mobile technology have brought vast benefits to human being. However, authentication mechanisms on portable smart devices, particularly conventional biometric based approaches, still remain security and privacy concerns. These traditional systems are mostly based on pattern recognition and machine learning algorithms, wherein original biometric templates or extracted features are stored under unconcealed form for performing matching with a new biometric sample in the authentication phase. In this paper, we propose a novel gait based authentication using biometric cryptosystem to enhance the system security and user privacy on the smart phone. Extracted gait features are merely used to biometrically encrypt a cryptographic key which is acted as the authentication factor. Gait signals are acquired by using an inertial sensor named accelerometer in the mobile device and error correcting codes are adopted to deal with the natural variation of gait measurements. We evaluate our proposed system on a dataset consisting of gait samples of 34 volunteers. We achieved the lowest false acceptance rate (FAR) and false rejection rate (FRR) of 3.92% and 11.76%, respectively, in terms of key length of 50 bits.