diff --git a/subsys/usb/usb_c/usbc_pe_common.c b/subsys/usb/usb_c/usbc_pe_common.c
index 9cff53d995b..7cbacbeafdf 100644
--- a/subsys/usb/usb_c/usbc_pe_common.c
+++ b/subsys/usb/usb_c/usbc_pe_common.c
@@ -1371,6 +1371,12 @@ static const struct smf_state pe_states[PE_STATE_COUNT] = {
 		pe_src_ready_exit,
 		NULL,
 		NULL),
+	[PE_SRC_DISABLED] = SMF_CREATE_STATE(
+		pe_src_disabled_entry,
+		NULL,
+		NULL,
+		NULL,
+		NULL),
 	[PE_SRC_TRANSITION_TO_DEFAULT] = SMF_CREATE_STATE(
 		pe_src_transition_to_default_entry,
 		pe_src_transition_to_default_run,
diff --git a/subsys/usb/usb_c/usbc_pe_common_internal.h b/subsys/usb/usb_c/usbc_pe_common_internal.h
index 46a1f3adf42..9b18d59d80d 100644
--- a/subsys/usb/usb_c/usbc_pe_common_internal.h
+++ b/subsys/usb/usb_c/usbc_pe_common_internal.h
@@ -83,6 +83,8 @@ enum usbc_pe_state {
 	PE_SRC_TRANSITION_SUPPLY,
 	/** PE_SRC_Ready */
 	PE_SRC_READY,
+	/** PE_SRC_Disabled */
+	PE_SRC_DISABLED,
 	/** PE_SRC_Hard_Reset */
 	PE_SRC_HARD_RESET,
 	/** PE_SRC_Hard_Reset_Received */
diff --git a/subsys/usb/usb_c/usbc_pe_src_states.c b/subsys/usb/usb_c/usbc_pe_src_states.c
index 8e09d8c3525..5e0b1a03c66 100644
--- a/subsys/usb/usb_c/usbc_pe_src_states.c
+++ b/subsys/usb/usb_c/usbc_pe_src_states.c
@@ -154,9 +154,12 @@ void pe_src_discovery_run(void *obj)
 	 *	1) The SourceCapabilityTimer times out
 	 *	2) And CapsCounter ≤ nCapsCount
 	 */
-	if (usbc_timer_expired(&pe->pd_t_typec_send_source_cap)
-			&& pe->caps_counter <= PD_N_CAPS_COUNT) {
-		pe_set_state(dev, PE_SRC_SEND_CAPABILITIES);
+	if (usbc_timer_expired(&pe->pd_t_typec_send_source_cap)) {
+		if (pe->caps_counter <= PD_N_CAPS_COUNT) {
+			pe_set_state(dev, PE_SRC_SEND_CAPABILITIES);
+		} else {
+			pe_set_state(dev, PE_SRC_DISABLED);
+		}
 	}
 }
 
@@ -483,6 +486,19 @@ void pe_src_ready_exit(void *obj)
 	}
 }
 
+/**
+ * @brief 8.3.3.2.7 PE_SRC_Disabled State
+ */
+void pe_src_disabled_entry(void *obj)
+{
+	LOG_INF("PE_SRC_Disabled");
+
+	/*
+	 * Unresponsive to USB Power Delivery messaging, but not to Hard Reset
+	 * Signaling. See pe_got_hard_reset
+	 */
+}
+
 /**
  * @brief 8.3.3.2.11 PE_SRC_Transition_to_default State
  */
diff --git a/subsys/usb/usb_c/usbc_pe_src_states_internal.h b/subsys/usb/usb_c/usbc_pe_src_states_internal.h
index 74403b6d651..0cef77fa535 100644
--- a/subsys/usb/usb_c/usbc_pe_src_states_internal.h
+++ b/subsys/usb/usb_c/usbc_pe_src_states_internal.h
@@ -57,6 +57,11 @@ void pe_src_ready_entry(void *obj);
 void pe_src_ready_run(void *obj);
 void pe_src_ready_exit(void *obj);
 
+/**
+ * @brief PE_SRC_Disabled State
+ */
+void pe_src_disabled_entry(void *obj);
+
 /**
  * @brief PE_SRC_Transition_To_Default State
  */