Physical Unclonable Function (PUF) is an excellent choice for key management in security domain. A Silicon PUF based RFID privacy protocol is proposed. Unlike general PUF applications which apply PUF in the tag-end, we employ PUF within a reader. Challenge -Responding Pairs (CRPs) on PUF in the proposal are reusable. Tag’s data structure is designed to a three level stack. Each level of the stack stands for a privacy state of the tag. State changing needs a password which only be transferred with plaintext. Password produce, storage, input/output operations are program control. We take a supermarket as application scene.