diff --git a/CHANGELOG.md b/CHANGELOG.md
index fcabe984..1220d98e 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -14,6 +14,11 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
     - **Parallel Chunking**: Implemented parallel processing for large document chunking in `_extract_entities_chunked` and `_extract_relations_chunked`, significantly reducing latency for long-form text analysis.
     - **Thread-Safe Progress Tracking**: Enhanced `ProgressTracker` to handle concurrent updates from multiple threads without race conditions during batch processing.
 
+### Security
+- **Secure Caching**:
+    - Updated `ExtractionCache` to exclude sensitive parameters (e.g., `api_key`, `token`, `password`) from cache key generation, preventing secret leakage and enabling safe cache sharing.
+    - Upgraded cache key hashing algorithm from MD5 to **SHA-256** for enhanced collision resistance and security.
+
 ### Performance
 - **Bottleneck Optimization (GitHub Issue #186)**:
     - **Resolved Bottleneck #1 (Sequential Processing)**: Replaced sequential `for` loops with parallel execution for both document-level batches and intra-document chunks.
diff --git a/semantica/semantic_extract/cache.py b/semantica/semantic_extract/cache.py
index 00918175..a696de85 100644
--- a/semantica/semantic_extract/cache.py
+++ b/semantica/semantic_extract/cache.py
@@ -72,16 +72,23 @@ class ExtractionCache:
     def _generate_key(self, text: str, **params) -> str:
         """
         Generate a stable cache key based on text and parameters.
+        
+        Note: Sensitive parameters like 'api_key' are excluded from the cache key
+        to prevent security risks and ensure cache sharing where appropriate.
         """
+        # Filter out sensitive keys
+        sensitive_keys = {'api_key', 'token', 'password', 'secret', 'auth', 'authorization'}
+        filtered_params = {k: v for k, v in params.items() if k.lower() not in sensitive_keys}
+
         # Create a stable string representation of params
         # Sort keys to ensure consistent ordering
-        param_str = json.dumps(params, sort_keys=True, default=str)
+        param_str = json.dumps(filtered_params, sort_keys=True, default=str)
         
         # Combine text and params
         content = f"{text}|{param_str}"
         
-        # Return hash
-        return hashlib.md5(content.encode('utf-8')).hexdigest()
+        # Return hash (SHA-256 for better security than MD5)
+        return hashlib.sha256(content.encode('utf-8')).hexdigest()
 
     def get(self, namespace: str, text: str, **params) -> Optional[Any]:
         """
diff --git a/tests/semantic_extract/test_performance.py b/tests/semantic_extract/test_performance.py
index b94d694e..3152defd 100644
--- a/tests/semantic_extract/test_performance.py
+++ b/tests/semantic_extract/test_performance.py
@@ -98,6 +98,31 @@ class TestSemanticExtractImprovements(unittest.TestCase):
             self.assertEqual(mock_provider.generate_typed.call_count, 1)
             
             print("  Cache hit verified for entities.")
+
+    def test_secure_caching(self):
+        """Test that sensitive parameters are excluded from cache keys."""
+        print("\nTesting Secure Caching...")
+        
+        text = "Security test."
+        
+        # Mock provider
+        mock_provider = MagicMock()
+        mock_provider.is_available.return_value = True
+        mock_entities_response = MagicMock()
+        mock_entities_response.entities = [MagicMock(text="Test", label="TEST", confidence=1.0)]
+        mock_provider.generate_typed.return_value = mock_entities_response
+        
+        with patch('semantica.semantic_extract.methods.create_provider', return_value=mock_provider):
+            # First call with one API key
+            extract_entities_llm(text, provider="openai", model="gpt-4", api_key="secret_key_1")
+            
+            # Second call with DIFFERENT API key
+            # If secure caching is working, this should be a CACHE HIT because api_key is ignored
+            extract_entities_llm(text, provider="openai", model="gpt-4", api_key="secret_key_2")
+            
+            # Provider should have been called ONLY ONCE
+            self.assertEqual(mock_provider.generate_typed.call_count, 1)
+            print("  Secure caching verified: Changing API key did not trigger new extraction.")
             
             # Verify cache content
             self.assertIn("entities", _result_cache._caches)