Abstract: A new distributed key management scheme based on self-certified public key system and threshold cryptography is proposed for Ad hoc network. The storage space and the communication overheads can be reduced because the public key is self certified and the certificate is unnecessary. There is no key escrow problem since the key distribution center (KDC) does not know the users' private keys. The idea of composite public key (CPK) is introduced for selecting random number for threshold key distribution. It reduces the process of generating a random number before threshold signature is issued in traditional ElGamal type threshold signature and so it reduces the communication and computation overheads of network nodes. The analysis shows that the scheme is more secure and efficient than previous works implemented with public key systems.