Abstract-Database encryption is a fundamental technique in the security mechanisms of database that is characterized by both the fast speed of the conventional encryption and the convenience of key distribution of public key encryption. There are two problems with traditional database encryption schemes. They show tradeoff between efficiency and security. Furthermore, these schemes can't solve the problem of storing multi-level encrypted elements into database besides having no ability for effective key management. In this paper, a new paradigm for database encryption is proposed in which database encryption can be provided as a service to applications with seamless access to encrypted database. The proposed system utilizes a chaotic encryption method based on cellular automata to realize higher complexity of crypt-analytical attacks. Cellular Automata rules are defined based on chaos mapping to generate a symmetric key. Furthermore, a fuzzy observer based scheme for synchronizing chaotic keys of encrypted signal is employed to enhance key distribution. The suggested system have some advantages such as confusion, diffusion, very large number of passwords helped in building of symmetric private key, key-dependent mapping and increasing system complexity with the impact of indefinite rules and chaos mapping. Simulation results obtained from some database demonstrate the strong performance of the proposed encryption system.