Secure communication between two nodes in a network depends on reliable key management systems that generate and distribute keys between communicating nodes and a secure routing protocol that establishes a route between them. But due to lack of central server and infrastructure in Mobile Ad hoc Networks (MANETs), this is major problem to manage the keys in the network. Dynamically changes in network's topology causes weak trust relationship among the nodes in the network. In MANETs a mobile node operates as not only end terminal but also as an intermediate router. Therefore, a multi-hop scenario occurs for communication in MANETs; where there may be one or more malicious nodes in between source and destination. A routing protocol is said to be secure that detects the detrimental effects of malicious node(s in the path from source to destination). In this paper, we proposed a key management scheme and a secure routing protocol that secures on demand routing protocol such as DSR and AODV. We assume that MANETs is divided into groups having a group leader in each group. Group leader has responsibility of key management in its group. Proposed key management scheme is a decentralized scheme that does not require any Trusted Third Party (TTP) for key management. In proposed key management system, both a new node and group leader authenticates each other mutually before joining the network. While proposed secure routing protocol allows both communicating parties as well as intermediate nodes to authenticate other nodes and maintains message integrity