We describe the development of a Quantum Interactive Learning Tutorial (QuILT) on quantum key distribution, a context which involves a practical application of quantum mechanics. The QuILT helps upper-level undergraduate students learn quantum mechanics using a simple two state system and was developed based upon the findings of cognitive research and physics education research. One protocol used in the QuILT involves generating a random shared key over a public channel for encrypting and decrypting information using single photons with non-orthogonal polarization states, and another protocol makes use of two entangled spin-½ particles. The QuILT uses a guided approach and focuses on helping students build links between the formalism and conceptual aspects of quantum physics without compromising the technical content. We also discuss findings from a preliminary in-class evaluation.