Despite earlier plans not to do a browser update until Longhorn's release in 2006, Microsoft chairman Bill Gates confirmed that code for IE 7 will be available this summer in beta and in full by Christmas.
The browser will incorporate antivirus technology from recently acquired Sybari, and enhanced anti-phishing software.
"Anti-phishing will definitely be built in to IE 7," said Brendon Lynch, senior privacy strategist at Microsoft.
"We are looking to make it very visible and easy to use to ensure that it's really effective. The technology works in a similar way to anti-spam technologies by picking up keywords and writing styles."