diff --git a/Core/HLE/scePspNpDrm_user.cpp b/Core/HLE/scePspNpDrm_user.cpp
index 4eef617052..6e7317ecc2 100644
--- a/Core/HLE/scePspNpDrm_user.cpp
+++ b/Core/HLE/scePspNpDrm_user.cpp
@@ -1,15 +1,80 @@
 #include "scePspNpDrm_user.h"
 
+#include "Core/MemMapHelpers.h"
 #include "Core/HLE/HLE.h"
 #include "Core/HLE/FunctionWrappers.h"
 #include "Core/HLE/sceIo.h"
+#include "Core/FileSystems/MetaFileSystem.h"
+
+extern MetaFileSystem pspFileSystem;
+
+// PSP NpDrm licensee key tracking
+static const int PSP_NPDRM_LICENSEE_KEY_LENGTH = 0x10;
+static u8 licenseeKey[PSP_NPDRM_LICENSEE_KEY_LENGTH];
+static bool isLicenseeKeySet = false;
+
+// Error codes matching JPCSP
+static const int ERROR_NPDRM_NO_K_LICENSEE_SET = 0x80550901;
+static const int ERROR_NPDRM_INVALID_FILE = 0x80550902;
+
+// Check if the file is an encrypted EDAT file by reading the magic number
+static bool isEncrypted(u32 edataFd) {
+	// Check for "\0PSPEDAT" magic number
+	// The magic bytes are: 0x00 0x50 0x53 0x50 0x45 0x44 0x41 0x54
+	// Which translates to: 0x50535000 and 0x54414445 as uint32_t (little endian)	
+	
+	u32 error;
+	// Get the file handle from the file descriptor
+	u32 fileHandle = __IoGetFileHandleFromId(edataFd, error);
+	if (fileHandle == (u32)-1) {
+		// Invalid file handle, assume not encrypted
+		return false;
+	}
+	
+	// Save the current file position
+	s64 originalPos = pspFileSystem.GetSeekPos(fileHandle);
+	
+	// Seek to the beginning of the file
+	pspFileSystem.SeekFile(fileHandle, 0, FILEMOVE_BEGIN);
+	
+	// Read 8 bytes from the file
+	u8 header[8];
+	size_t bytesRead = pspFileSystem.ReadFile(fileHandle, header, 8);
+	
+	// Restore the original file position
+	pspFileSystem.SeekFile(fileHandle, (s32)originalPos, FILEMOVE_BEGIN);
+	
+	// Check if we read enough bytes
+	if (bytesRead < 8) {
+		return false;
+	}
+	
+	// Check the magic numbers
+	// Bytes 0-3 should be 0x50535000 (PSP\0) in little endian
+	// Bytes 4-7 should be 0x54414445 (EDAT) in little endian
+	u32 magic1 = (header[3] << 24) | (header[2] << 16) | (header[1] << 8) | header[0];
+	u32 magic2 = (header[7] << 24) | (header[6] << 16) | (header[5] << 8) | header[4];
+	
+	// PSP\0 = 0x50535000, EDAT = 0x54414445
+	return (magic1 == 0x50535000 && magic2 == 0x54414445);
+}
 
 static int sceNpDrmSetLicenseeKey(u32 npDrmKeyAddr) {
-	return hleLogWarning(Log::sceIo, 0, "UNIMPL");
+	// Read the licensee key from memory
+	// The key is PSP_NPDRM_LICENSEE_KEY_LENGTH bytes (0x10 = 16 bytes)
+	if (Memory::IsValidAddress(npDrmKeyAddr)) {
+		Memory::Memcpy(licenseeKey, npDrmKeyAddr, PSP_NPDRM_LICENSEE_KEY_LENGTH, "NpDrmSetLicenseeKey");
+		isLicenseeKeySet = true;
+		return hleLogInfo(Log::sceIo, 0);
+	}
+	return hleLogError(Log::sceIo, ERROR_NPDRM_INVALID_FILE, "Invalid address");
 }
 
 static int sceNpDrmClearLicenseeKey() {
-	return hleLogWarning(Log::sceIo, 0, "UNIMPL");
+	// Clear the licensee key and mark it as not set
+	memset(licenseeKey, 0, PSP_NPDRM_LICENSEE_KEY_LENGTH);
+	isLicenseeKeySet = false;
+	return hleLogInfo(Log::sceIo, 0);
 }
 
 static int sceNpDrmRenameCheck(const char *filename) {
@@ -17,20 +82,45 @@ static int sceNpDrmRenameCheck(const char *filename) {
 }
 
 static int sceNpDrmEdataSetupKey(u32 edataFd) {
-	int usec = 0;
-
-	// __IoIoctl logs like a hle function, so no need to log here.
-
-	// set PGD offset
-	int retval = __IoIoctl(edataFd, 0x04100002, 0x90, 0, 0, 0, usec);
-	if (retval < 0) {
-		return hleDelayResult(hleLogError(Log::sceIo, retval), "io ctrl command", usec);
+	// Return an error if the key has not been set.
+	// Note: An empty key is valid, as long as it was set with sceNpDrmSetLicenseeKey.
+	if (!isLicenseeKeySet) {
+		return hleLogError(Log::sceIo, ERROR_NPDRM_NO_K_LICENSEE_SET, "Licensee key not set");
 	}
 
-	// call PGD open
-	// Note that usec accumulates.
-	retval = __IoIoctl(edataFd, 0x04100001, 0, 0, 0, 0, usec);
-	return hleDelayResult(hleLogDebugOrError(Log::sceIo, retval), "io ctrl command", usec);
+	// Get file info to validate the file descriptor
+	u32 error;
+	u32 fileHandle = __IoGetFileHandleFromId(edataFd, error);
+	if (fileHandle == (u32)-1) {
+		return hleLogError(Log::sceIo, -1, "Invalid file descriptor");
+	}
+
+	int result = 0;
+
+	// Check if the file is encrypted
+	if (isEncrypted(edataFd)) {
+		// File is encrypted, set up PGD decryption
+		// In JPCSP, this wraps the file in an EDATVirtualFile (lines 215-218)
+		// In this C++ implementation, we use ioctl commands to achieve the same result
+		int usec = 0;
+
+		// set PGD offset
+		int retval = __IoIoctl(edataFd, 0x04100002, 0x90, 0, 0, 0, usec);
+		if (retval < 0) {
+			return hleDelayResult(hleLogError(Log::sceIo, retval), "io ctrl command", usec);
+		}
+
+		// call PGD open
+		// Note that usec accumulates.
+		retval = __IoIoctl(edataFd, 0x04100001, 0, 0, 0, 0, usec);
+		if (retval < 0) {
+			return hleDelayResult(hleLogError(Log::sceIo, retval), "io ctrl command", usec);
+		}
+		
+		return hleDelayResult(hleLogDebug(Log::sceIo, result), "io ctrl command", usec);
+	}
+
+	return hleLogInfo(Log::sceIo, result);
 }
 
 static int sceNpDrmEdataGetDataSize(u32 edataFd) {
@@ -56,4 +146,3 @@ void Register_sceNpDrm() {
 	RegisterHLEModule("sceNpDrm", ARRAY_SIZE(sceNpDrm), sceNpDrm);
 	RegisterHLEModule("scePspNpDrm_user", ARRAY_SIZE(sceNpDrm), sceNpDrm);
 }
-