A mobile ad-hoc network (MANET) is a wireless communication network, which does not rely on any centralized management or an already existing infrastructure. Various key management authorities distributed over the network, each with a periodically updated share of the secrete key, is usually adopted. Thus many efforts have been made to adapt key management authority’s tasks to the dynamic environments of MANETS and distribute the tasks of among MANET nodes. At present various cryptographic techniques are being deployed to meet the ever-changing needs, which compels to device unique security mechanism for MANET, enabling individual and corporate entities to protect the transmission of data without any intrusion by illegal means. Cryptographic techniques could be either of symmetric key cryptography and or asymmetric key cryptography or hash functions. Symmetric cryptosystem requires the existence of common shared secret key between two communicating nodes whereas asymmetric cryptosystem maintains unique key pair between any two communicating nodes (peers). An asymmetric cryptosystem is more efficient in a given task oriented key utilization process. In this mechanism, the private key needs to be kept secret with one entity but the authenticity of the corresponding public key for the same entity must be guaranteed somehow by a trusted third party in this paper, a novel mutual authentication and key management (agreement) protocol has been developed for one hop communication in mobile ad-hoc networks. The protocol has several salient features like mutual authentication, confidentiality, integrity and key agreement. The protocol utilizes RSA signature generation and verification algorithm.