An effective probabilistic polygraphic cryptosystem is developed, which is capable of performing compression as well as expansion encryption. There are two set of keys which are used, key1 is developed at the time of encryption whereas key2(is a matrix which can at most contain M X T keys in it) is used to change the arrangement(as it is multiplied with Alice’s private arrangement) hence a secure exchange system is established, again we continuously shift from one polygraphic arrangement to the other while encrypting the same message after fixed number of encryption’s then this will secure the cryptosystem from various attacks, and make it more compact and secure. Again using Diffie and Hellman key exchange for exchanging keys which are used to produce a unique arrangement. The key1 is generated in such a fashion that it displays as of how many fake characters are generated before every cipher character or key number and what operation is performed on those.