I suspect this may be a serious bug in 10.10's Disk Utility application , creating encrypted images is impossible. It happens on both my iMac and my MacBook both of which were setup as new systems. (Erased and installed Yosemite from scratch) Any time i attempt to create an encrypted image i get this error: "Unable to create NAME.dmg (Inappropriate IOCTL for device)" If i try to create an unencrypted disk image it works fine, heck if i run the following in terminal that gets around the problem: hdiutil create -encryption AES-256 -stdinpass /Volumes/Mac\ System\ Disk/System\ Backups/Desktop/Macintosh\ HD.dmg -srcdevice /dev/disk1s2 Has anyone else experienced this problem with Disk Utility and if so, is it fixable? I'd like to know what the error even means, searching it up only gave me people having trouble with Linux and scripting, which i am not doing. Edit: It is worth noting that this error only seems to occur if im trying to make an image of any attached disk. Whether its a USB or Hard Disk. Creating a blank encrypted image works fine so not sure whats going on. Also, when attempting to image a drive i have made sure its not in use by Finder or any other application by unmounting the device.