If you are using the loadable module you must have the module loaded first with the command:

$ sudo modprobe loop	
	

The following commands can be used as an example of using the loop device.

$ dd if=/dev/zero of=file bs=1k count=100
100+0 records in
100+0 records out
102400 bytes (102 kB) copied, 0.00126554 s, 80.9 MB/s	

$ sudo losetup /dev/loop0 file

$ sudo mkfs.ext3 /dev/loop0
mke2fs 1.40.8 (13-Mar-2008)
Filesystem label=
OS type: Linux
Block size=1024 (log=0)
Fragment size=1024 (log=0)
16 inodes, 100 blocks
5 blocks (5.00%) reserved for the super user
First data block=1
1 block group
8192 blocks per group, 8192 fragments per group
16 inodes per group

Writing inode tables: done

Filesystem too small for a journal
Writing superblocks and filesystem accounting information: done

This filesystem will be automatically checked every 24 mounts or
180 days, whichever comes first.  Use tune2fs -c or -i to override.
	

mount loop device

$ sudo mkdir /mnt/loop
$ sudo mount /dev/loop0 /mnt/loop
	

Now！ you can using it as harddisk.

umount loop device

$ sudo umount /mnt/loop/
$ sudo losetup -d /dev/loop0	
	

Maybe also encryption modules are needed.

$ sudo modprobe cryptoloop	
$ sudo modprobe des
	

enable data encryption

$ dd if=/dev/zero of=encryption_file bs=1k count=100
100+0 records in
100+0 records out
102400 bytes (102 kB) copied, 0.00130537 s, 78.4 MB/s

$ sudo losetup -e des /dev/loop0 encryption_file
	

If you are using the loadable module you may remove the module with the command

$ sudo rmmod loop des cryptoloop