In cryptography, a shared secret is a piece of data, known only to the parties involved, in a secure communication. The shared secret can be a password, a passphrase, a big number or an array of randomly chosen bytes.
The shared secret is either shared beforehand between the communicating parties, in which case it can also be called a pre-shared key. Or it is created at the start of the communication session by using a key-agreement protocol, for-instance using public-key cryptography such as Diffie-Hellman or using symmetric-key cryptography such as Kerberos.
The shared secret can be used for authentication (for instance when logging in to a remote system) using methods such as challenge-response or it can be fed to a key derivation function to produce one or more keys to use for encryption and/or MACing of messages.
See also 
- Key stretching - A method to create a stronger key from a weak key or a weak shared secret.
- Security question - implementation method
- Handbook of Applied Cryptography by Menezes, van Oorschot and Vanstone (2001), chapter 10 and 12.