Problem statement: Key management is an important cryptographic technique for providing security in a dynamic environment of sensor networks. To provide a secure communication among a group of sensor nodes keys should established in an efficient manner. We introduced an efficient and dynamic key management system for dynamic sensor networks. Approach: We pre deployed some of the keying materials in all the nodes and keys are calculated using keying materials and some random matrix which is distributed by Group Controller node. If there is any change in the member ship then re-keying process will be performed to change the old group key. Results: Our key management system eliminates the storage of long keys and it will improve the network resilience. It provides the forward and backward secrecy among the group of nodes. It reduces the computation overhead of group controller and also the communication overhead. Conclusion: Experimental results show that the proposed method perform very well for improving the success ratio of key establishment and enhance security while reducing the communication overhead and resource consumption.