Yes, SFTP encrypts files by working over the SSH data stream to establish a secure connection and provide organizations with an increased level of file transfer protection due to its encryption capabilities.

SFTP uses encryption algorithms to securely move data to your server and keep files unreadable during the process, while authentication prevents unauthorized file access during the operation. SFTP uses only one connection and encrypts both authentication information and the files being transferred.

Read more: Are SFTP Files Encrypted?