Presently, the most practical approach for bootstrapping initial secret keys in sensor networks is to load keys into sensor nodes before they are deployed. However, some of them are vulnerable to impersonation attacks. We describe a novel key distribution and management scheme for clustered ad hoc sensor networks. The scheme uses the Boneh-Franklin’s ID-based encryption (IBE) scheme and Yi’s ID-based signature scheme to achieve mutual authentication between nodes. The signature scheme is used to distribute a cluster key which can be updated. We also derive a master key from the signature which can also be updated when needed. Our contribution is that we resolved the impersonation problems that exist in current key distribution schemes for ad hoc sensor networks. A timestamp is incorporated in the signing procedure, avoiding message replay attacks. Finally, This scheme can be extended to hierarchical ad hoc sensor networks.