The security of wireless networks and systems is becoming increasingly important as wireless devices are more and more ubiquitous nowadays. The wireless channel exhibits the spatial uncorrelation property, which is that the characteristics of a wireless channel become uncorrelated every half carrier wavelength over distance. This property has prompted an emerging research area that utilizes wireless channel characteristics to achieve location distinction, to detect location changes or facilitate authentication of wireless users, and to establish shared secret key between legitimate communicators. This dissertation includes two work toward the security improvement of existing wireless networks and systems. With the discovered channel camouflage and manipulation techniques in wireless networks, traditional wireless channel based authentication or secure communication systems are broke or renovated. The first work proposes a new attack against all existing location distinction approaches that are built on this spatial uncorrelation property. With the discovered attack, an attacker can easily bypass authentication or camouflage location changes by creating an artificial wireless channel similar to a legitimate one. This dissertation also presents a detection technique that utilizes an auxiliary receiver or antenna to identify these fake channels. On the other hand, the second work shows that the legitimate users can also benefit from constructing these artificial wireless channels and apply them in a novel wireless key establishment. The proposed technique enables the transmitter to specify any content as the secret key and securely deliver it to the target receiver, and meanwhile removes the reconciliation process which is necessary for conventional wireless key establishment schemes.