A security device and an operating method thereof, which generate masking data for masking a key on the basis of a physically unclonable function (PUF), are provided. The security device includes a PUF circuit including a plurality of PUF cells outputting random key data and masking data, a key generator configured to generate a key through post-processing performed on the random key data, and a masking module configured to mask and store the key by using the masking data, wherein the random key data and the masking data are generated by different PUF cells.