This paper discusses about a new algorithm in the area of cryptography. The algorithm is expected to find an extensive use in wireless telecom networks for end-to-end network security. A new stream cipher based on dynamic S-box is designed, implemented and tested in MATLAB. The new cipher thus generated is tested through 16 different randomness tests mentioned in one of the NIST special publication 800-22 . For this implementation many references have been taken from the already existing Advanced Encryption Standard structure. This work was done as part of the fulfillment of Master in Technology at Manipal Institute of Technology, Manipal.