diff --git a/subsys/bluetooth/host/hci_core.c b/subsys/bluetooth/host/hci_core.c
index 2c103225cb6..9ec63fb987a 100644
--- a/subsys/bluetooth/host/hci_core.c
+++ b/subsys/bluetooth/host/hci_core.c
@@ -3248,6 +3248,7 @@ static void le_ltk_request(struct net_buf *buf)
 #endif /* !CONFIG_BT_SMP_SC_PAIR_ONLY */
 
 	le_ltk_neg_reply(evt->handle);
+	bt_smp_keys_reject(conn);
 
 done:
 	bt_conn_unref(conn);
diff --git a/subsys/bluetooth/host/smp.c b/subsys/bluetooth/host/smp.c
index 28de92b7f9b..5f4ed0d17bd 100644
--- a/subsys/bluetooth/host/smp.c
+++ b/subsys/bluetooth/host/smp.c
@@ -5000,6 +5000,23 @@ bool bt_smp_keys_check(struct bt_conn *conn)
 	return true;
 }
 
+void bt_smp_keys_reject(struct bt_conn *conn)
+{
+	struct bt_smp *smp;
+
+	smp = smp_chan_get(conn);
+	if (!smp) {
+		return;
+	}
+
+	if (atomic_test_bit(smp->flags, SMP_FLAG_SEC_REQ)) {
+		bt_conn_security_changed(smp->chan.chan.conn,
+					 BT_SECURITY_ERR_PIN_OR_KEY_MISSING);
+	}
+
+	smp_reset(smp);
+}
+
 static int bt_smp_accept(struct bt_conn *conn, struct bt_l2cap_chan **chan)
 {
 	int i;
diff --git a/subsys/bluetooth/host/smp.h b/subsys/bluetooth/host/smp.h
index a6354419eeb..c6a3b6a5138 100644
--- a/subsys/bluetooth/host/smp.h
+++ b/subsys/bluetooth/host/smp.h
@@ -128,6 +128,7 @@ int bt_smp_send_security_req(struct bt_conn *conn);
 void bt_smp_update_keys(struct bt_conn *conn);
 bool bt_smp_get_tk(struct bt_conn *conn, u8_t *tk);
 bool bt_smp_keys_check(struct bt_conn *conn);
+void bt_smp_keys_reject(struct bt_conn *conn);
 
 int bt_smp_br_send_pairing_req(struct bt_conn *conn);