diff --git a/subsys/bluetooth/controller/Kconfig b/subsys/bluetooth/controller/Kconfig
index 768975ba458..3249c16796b 100644
--- a/subsys/bluetooth/controller/Kconfig
+++ b/subsys/bluetooth/controller/Kconfig
@@ -99,6 +99,12 @@ comment "BLE Controller features"
 
 if BLUETOOTH_CONN
 
+config BLUETOOTH_CONTROLLER_LE_ENC
+	bool
+	default y
+	# Enable support for Bluetooth v4.0 LE Encryption feature in the
+	# Controller.
+
 config BLUETOOTH_CONTROLLER_LE_PING
 	bool "LE Ping"
 	default y
@@ -252,6 +258,7 @@ if BLUETOOTH_CONN
 
 config BLUETOOTH_CONTROLLER_FAST_ENC
 	bool "Fast Encryption Setup"
+	depends on BLUETOOTH_CONTROLLER_LE_ENC
 	help
 	  Enable connection encryption setup in 3 connection intervals.
 	  Peripheral will respond to Encryption Request with Encryption Response
diff --git a/subsys/bluetooth/controller/hci/hci.c b/subsys/bluetooth/controller/hci/hci.c
index 54c5aebbb5c..4efc6caae88 100644
--- a/subsys/bluetooth/controller/hci/hci.c
+++ b/subsys/bluetooth/controller/hci/hci.c
@@ -721,6 +721,7 @@ static void le_set_host_chan_classif(struct net_buf *buf, struct net_buf **evt)
 	ccst->status = (!status) ? 0x00 : BT_HCI_ERR_CMD_DISALLOWED;
 }
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void le_start_encryption(struct net_buf *buf, struct net_buf **evt)
 {
 	struct bt_hci_cp_le_start_encryption *cmd = (void *)buf->data;
@@ -735,9 +736,11 @@ static void le_start_encryption(struct net_buf *buf, struct net_buf **evt)
 
 	*evt = cmd_status((!status) ? 0x00 : BT_HCI_ERR_CMD_DISALLOWED);
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 #endif /* CONFIG_BLUETOOTH_CENTRAL */
 
 #if defined(CONFIG_BLUETOOTH_PERIPHERAL)
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void le_ltk_req_reply(struct net_buf *buf, struct net_buf **evt)
 {
 	struct bt_hci_cp_le_ltk_req_reply *cmd = (void *)buf->data;
@@ -768,6 +771,7 @@ static void le_ltk_req_neg_reply(struct net_buf *buf, struct net_buf **evt)
 	rp->status = (!status) ?  0x00 : BT_HCI_ERR_CMD_DISALLOWED;
 	rp->handle = sys_le16_to_cpu(handle);
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 #endif /* CONFIG_BLUETOOTH_PERIPHERAL */
 
 static void le_read_remote_features(struct net_buf *buf, struct net_buf **evt)
@@ -1076,12 +1080,15 @@ static int controller_cmd_handle(u8_t ocf, struct net_buf *cmd,
 		le_set_host_chan_classif(cmd, evt);
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case BT_OCF(BT_HCI_OP_LE_START_ENCRYPTION):
 		le_start_encryption(cmd, evt);
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 #endif /* CONFIG_BLUETOOTH_CENTRAL */
 
 #if defined(CONFIG_BLUETOOTH_PERIPHERAL)
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case BT_OCF(BT_HCI_OP_LE_LTK_REQ_REPLY):
 		le_ltk_req_reply(cmd, evt);
 		break;
@@ -1089,6 +1096,7 @@ static int controller_cmd_handle(u8_t ocf, struct net_buf *cmd,
 	case BT_OCF(BT_HCI_OP_LE_LTK_REQ_NEG_REPLY):
 		le_ltk_req_neg_reply(cmd, evt);
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 #endif /* CONFIG_BLUETOOTH_PERIPHERAL */
 
 	case BT_OCF(BT_HCI_OP_LE_READ_REMOTE_FEATURES):
@@ -1450,6 +1458,7 @@ static void le_conn_update_complete(struct pdu_data *pdu_data, u16_t handle,
 	sep->supv_timeout = sys_cpu_to_le16(radio_cu->timeout);
 }
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void enc_refresh_complete(struct pdu_data *pdu_data, u16_t handle,
 				 struct net_buf *buf)
 {
@@ -1465,6 +1474,7 @@ static void enc_refresh_complete(struct pdu_data *pdu_data, u16_t handle,
 	ep->status = 0x00;
 	ep->handle = sys_cpu_to_le16(handle);
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_PING)
 static void auth_payload_timeout_exp(struct pdu_data *pdu_data, u16_t handle,
@@ -1562,9 +1572,11 @@ static void encode_control(struct radio_pdu_node_rx *node_rx,
 		le_conn_update_complete(pdu_data, handle, buf);
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case NODE_RX_TYPE_ENC_REFRESH:
 		enc_refresh_complete(pdu_data, handle, buf);
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_PING)
 	case NODE_RX_TYPE_APTO:
@@ -1616,6 +1628,7 @@ static void encode_control(struct radio_pdu_node_rx *node_rx,
 	}
 }
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void le_ltk_request(struct pdu_data *pdu_data, u16_t handle,
 			   struct net_buf *buf)
 {
@@ -1651,6 +1664,7 @@ static void encrypt_change(u8_t err, u16_t handle,
 	ep->handle = sys_cpu_to_le16(handle);
 	ep->encrypt = !err ? 1 : 0;
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 static void le_remote_feat_complete(u8_t status, struct pdu_data *pdu_data,
 				    u16_t handle, struct net_buf *buf)
@@ -1764,6 +1778,8 @@ static void encode_data_ctrl(struct radio_pdu_node_rx *node_rx,
 	u16_t handle = node_rx->hdr.handle;
 
 	switch (pdu_data->payload.llctrl.opcode) {
+
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_ENC_REQ:
 		le_ltk_request(pdu_data, handle, buf);
 		break;
@@ -1771,6 +1787,7 @@ static void encode_data_ctrl(struct radio_pdu_node_rx *node_rx,
 	case PDU_DATA_LLCTRL_TYPE_START_ENC_RSP:
 		encrypt_change(0x00, handle, buf);
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 	case PDU_DATA_LLCTRL_TYPE_FEATURE_RSP:
 		le_remote_feat_complete(0x00, pdu_data, handle, buf);
@@ -1780,11 +1797,13 @@ static void encode_data_ctrl(struct radio_pdu_node_rx *node_rx,
 		remote_version_info(pdu_data, handle, buf);
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_REJECT_IND:
 		encrypt_change(pdu_data->payload.llctrl.ctrldata.reject_ind.
 			       error_code,
 			       handle, buf);
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 	case PDU_DATA_LLCTRL_TYPE_CONN_PARAM_REQ:
 		le_conn_param_req(pdu_data, handle, buf);
@@ -1903,7 +1922,11 @@ s8_t hci_get_class(struct radio_pdu_node_rx *node_rx)
 			return HCI_CLASS_EVT_REQUIRED;
 		case NODE_RX_TYPE_TERMINATE:
 		case NODE_RX_TYPE_CONN_UPDATE:
+
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 		case NODE_RX_TYPE_ENC_REFRESH:
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_CONN_RSSI)
 		case NODE_RX_TYPE_RSSI:
 #endif
diff --git a/subsys/bluetooth/controller/ll_sw/ctrl.c b/subsys/bluetooth/controller/ll_sw/ctrl.c
index 7af3600a783..908b5e9dba5 100644
--- a/subsys/bluetooth/controller/ll_sw/ctrl.c
+++ b/subsys/bluetooth/controller/ll_sw/ctrl.c
@@ -260,6 +260,7 @@ static void ctrl_tx_enqueue(struct connection *conn,
 static void pdu_node_tx_release(u16_t handle,
 				struct radio_pdu_node_tx *node_tx);
 static void connection_release(struct connection *conn);
+static void terminate_ind_rx_enqueue(struct connection *conn, u8_t reason);
 static u32_t conn_update(struct connection *conn, struct pdu_data *pdu_data_rx);
 static u32_t is_peer_compatible(struct connection *conn);
 static u32_t conn_update_req(struct connection *conn);
@@ -271,15 +272,17 @@ static inline u32_t phy_upd_ind(struct radio_pdu_node_rx *radio_pdu_node_rx,
 				u8_t *rx_enqueue);
 #endif /* CONFIG_BLUETOOTH_CONTROLLER_PHY */
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void enc_req_reused_send(struct connection *conn,
 				struct radio_pdu_node_tx *node_tx);
-static void terminate_ind_rx_enqueue(struct connection *conn, u8_t reason);
 static void enc_rsp_send(struct connection *conn);
 static void start_enc_rsp_send(struct connection *conn,
 			       struct pdu_data *pdu_ctrl_tx);
+static void pause_enc_rsp_send(struct connection *conn);
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+
 static void unknown_rsp_send(struct connection *conn, u8_t type);
 static void feature_rsp_send(struct connection *conn);
-static void pause_enc_rsp_send(struct connection *conn);
 static void version_ind_send(struct connection *conn);
 
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_PING)
@@ -1307,6 +1310,7 @@ static inline u8_t isr_rx_conn_pkt_ack(struct pdu_data *pdu_data_tx,
 		terminate = 1;
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_ENC_REQ:
 		/* things from master stored for session key calculation */
 		memcpy(&_radio.conn_curr->llcp.encryption.skd[0],
@@ -1375,6 +1379,7 @@ static inline u8_t isr_rx_conn_pkt_ack(struct pdu_data *pdu_data_tx,
 		/* Procedure complete */
 		_radio.conn_curr->procedure_expire = 0;
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_DATA_LENGTH)
 	case PDU_DATA_LLCTRL_TYPE_LENGTH_REQ:
@@ -1781,6 +1786,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 			pdu_data_rx->payload.llctrl.ctrldata.terminate_ind.error_code;
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_ENC_REQ:
 		/* things from master stored for session key calculation */
 		memcpy(&_radio.conn_curr->llcp.encryption.skd[0],
@@ -1882,6 +1888,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 		/* Procedure complete */
 		_radio.conn_curr->procedure_expire = 0;
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 	case PDU_DATA_LLCTRL_TYPE_FEATURE_REQ:
 	case PDU_DATA_LLCTRL_TYPE_SLAVE_FEATURE_REQ:
@@ -1914,6 +1921,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 	}
 	break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_PAUSE_ENC_REQ:
 		pause_enc_rsp_send(_radio.conn_curr);
 
@@ -1942,6 +1950,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 		/* disable transmit encryption */
 		_radio.conn_curr->enc_tx = 0;
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 	case PDU_DATA_LLCTRL_TYPE_VERSION_IND:
 		_radio.conn_curr->llcp_version.version_number =
@@ -1970,6 +1979,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 		}
 		break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	case PDU_DATA_LLCTRL_TYPE_REJECT_IND:
 		/* resume data packet rx and tx */
 		_radio.conn_curr->pause_rx = 0;
@@ -1981,6 +1991,7 @@ isr_rx_conn_pkt_ctrl(struct radio_pdu_node_rx *radio_pdu_node_rx,
 		/* enqueue the reject ind */
 		*rx_enqueue = 1;
 		break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 	case PDU_DATA_LLCTRL_TYPE_CONN_PARAM_REQ:
 		/* connection update or params req in progress
@@ -5561,6 +5572,7 @@ static inline void event_ch_map_prep(struct connection *conn,
 
 }
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static inline void event_enc_prep(struct connection *conn)
 {
 	struct radio_pdu_node_tx *node_tx;
@@ -5695,6 +5707,7 @@ static inline void event_enc_prep(struct connection *conn)
 		ctrl_tx_enqueue(conn, node_tx);
 	}
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 static inline void event_fex_prep(struct connection *conn)
 {
@@ -6298,9 +6311,11 @@ static void event_connection_prepare(u32_t ticks_at_expire,
 			event_ch_map_prep(conn, event_counter);
 			break;
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 		case LLCP_ENCRYPTION:
 			event_enc_prep(conn);
 			break;
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 		case LLCP_FEATURE_EXCHANGE:
 			event_fex_prep(conn);
@@ -7426,6 +7441,7 @@ static inline u32_t phy_upd_ind(struct radio_pdu_node_rx *radio_pdu_node_rx,
 }
 #endif /* CONFIG_BLUETOOTH_CONTROLLER_PHY */
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 static void enc_req_reused_send(struct connection *conn,
 				struct radio_pdu_node_tx *node_tx)
 {
@@ -7504,6 +7520,25 @@ static void start_enc_rsp_send(struct connection *conn,
 	}
 }
 
+static void pause_enc_rsp_send(struct connection *conn)
+{
+	struct radio_pdu_node_tx *node_tx;
+	struct pdu_data *pdu_ctrl_tx;
+
+	/* acquire tx mem */
+	node_tx = mem_acquire(&_radio.pkt_tx_ctrl_free);
+	LL_ASSERT(node_tx);
+
+	pdu_ctrl_tx = (struct pdu_data *)node_tx->pdu_data;
+	pdu_ctrl_tx->ll_id = PDU_DATA_LLID_CTRL;
+	pdu_ctrl_tx->len = offsetof(struct pdu_data_llctrl, ctrldata);
+	pdu_ctrl_tx->payload.llctrl.opcode =
+		PDU_DATA_LLCTRL_TYPE_PAUSE_ENC_RSP;
+
+	ctrl_tx_enqueue(conn, node_tx);
+}
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+
 static void unknown_rsp_send(struct connection *conn, u8_t type)
 {
 	struct radio_pdu_node_tx *node_tx;
@@ -7550,24 +7585,6 @@ static void feature_rsp_send(struct connection *conn)
 	ctrl_tx_enqueue(conn, node_tx);
 }
 
-static void pause_enc_rsp_send(struct connection *conn)
-{
-	struct radio_pdu_node_tx *node_tx;
-	struct pdu_data *pdu_ctrl_tx;
-
-	/* acquire tx mem */
-	node_tx = mem_acquire(&_radio.pkt_tx_ctrl_free);
-	LL_ASSERT(node_tx);
-
-	pdu_ctrl_tx = (struct pdu_data *)node_tx->pdu_data;
-	pdu_ctrl_tx->ll_id = PDU_DATA_LLID_CTRL;
-	pdu_ctrl_tx->len = offsetof(struct pdu_data_llctrl, ctrldata);
-	pdu_ctrl_tx->payload.llctrl.opcode =
-		PDU_DATA_LLCTRL_TYPE_PAUSE_ENC_RSP;
-
-	ctrl_tx_enqueue(conn, node_tx);
-}
-
 static void version_ind_send(struct connection *conn)
 {
 	struct radio_pdu_node_tx *node_tx;
@@ -8595,6 +8612,7 @@ u32_t ll_chm_get(u16_t handle, u8_t *chm)
 	return 0;
 }
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 u32_t ll_enc_req_send(u16_t handle, u8_t *rand, u8_t *ediv, u8_t *ltk)
 {
 	struct connection *conn;
@@ -8715,6 +8733,7 @@ u32_t ll_start_enc_req_send(u16_t handle, u8_t error_code,
 
 	return 0;
 }
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
 
 u32_t ll_feature_req_send(u16_t handle)
 {
diff --git a/subsys/bluetooth/controller/ll_sw/ctrl.h b/subsys/bluetooth/controller/ll_sw/ctrl.h
index 8a3b85c4b0c..9a18d220fd1 100644
--- a/subsys/bluetooth/controller/ll_sw/ctrl.h
+++ b/subsys/bluetooth/controller/ll_sw/ctrl.h
@@ -34,6 +34,12 @@
 
 #define BIT64(n) (1ULL << (n))
 
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
+#define RADIO_BLE_FEAT_BIT_ENC BIT64(BT_LE_FEAT_BIT_ENC)
+#else /* !CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+#define RADIO_BLE_FEAT_BIT_ENC 0
+#endif /* !CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+
 #if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_PING)
 #define RADIO_BLE_FEAT_BIT_PING BIT64(BT_LE_FEAT_BIT_PING)
 #else /* !CONFIG_BLUETOOTH_CONTROLLER_LE_PING */
@@ -118,7 +124,7 @@
 
 #define RADIO_BLE_FEAT_BIT_MASK         0x1FFFF
 #define RADIO_BLE_FEAT_BIT_MASK_VALID   0x1CF2F
-#define RADIO_BLE_FEAT                  (BIT(BT_LE_FEAT_BIT_ENC) | \
+#define RADIO_BLE_FEAT                  (RADIO_BLE_FEAT_BIT_ENC | \
 					 BIT(BT_LE_FEAT_BIT_CONN_PARAM_REQ) | \
 					 BIT(BT_LE_FEAT_BIT_EXT_REJ_IND) | \
 					 BIT(BT_LE_FEAT_BIT_SLAVE_FEAT_REQ) | \
diff --git a/subsys/bluetooth/controller/ll_sw/ctrl_internal.h b/subsys/bluetooth/controller/ll_sw/ctrl_internal.h
index 148ae3d948f..3213f988179 100644
--- a/subsys/bluetooth/controller/ll_sw/ctrl_internal.h
+++ b/subsys/bluetooth/controller/ll_sw/ctrl_internal.h
@@ -9,7 +9,11 @@ enum llcp {
 	LLCP_NONE,
 	LLCP_CONNECTION_UPDATE,
 	LLCP_CHAN_MAP,
+
+#if defined(CONFIG_BLUETOOTH_CONTROLLER_LE_ENC)
 	LLCP_ENCRYPTION,
+#endif /* CONFIG_BLUETOOTH_CONTROLLER_LE_ENC */
+
 	LLCP_FEATURE_EXCHANGE,
 	LLCP_VERSION_EXCHANGE,
 	/* LLCP_TERMINATE, */