Password Protecting Documents in Word 2007

When you're finished with your document, click "Save As."

Then click the "Tools" button at the bottom left of the Save window and select "General Options":

Enter a password in the "Password to open" box.

If you want to prevent others from modifying the document, you could enter a separate password in the "Password to modify" box.

For maximum security, you should only share the password with the recipient in person or over the phone.