diff --git a/samples/bluetooth/peripheral_hids/Kconfig b/samples/bluetooth/peripheral_hids/Kconfig
new file mode 100644
index 0000000000..efea45cdea
--- /dev/null
+++ b/samples/bluetooth/peripheral_hids/Kconfig
@@ -0,0 +1,13 @@
+# Copyright 2023 Google LLC
+# SPDX-License-Identifier: Apache-2.0
+
+mainmenu "Bluetooth: Peripheral HIDs"
+
+config SAMPLE_BT_USE_AUTHENTICATION
+	bool "Enable passkey authentication"
+	default y
+	help
+	  Enable the passkey authentication callback and register the GATT
+	  read and and write attributes as authentication required.
+
+source "Kconfig.zephyr"
diff --git a/samples/bluetooth/peripheral_hids/README.rst b/samples/bluetooth/peripheral_hids/README.rst
index 9fc6e43e6a..de1e35aaa3 100644
--- a/samples/bluetooth/peripheral_hids/README.rst
+++ b/samples/bluetooth/peripheral_hids/README.rst
@@ -10,6 +10,11 @@ Similar to the :ref:`Peripheral <ble_peripheral>` sample, except that this
 application specifically exposes the HID GATT Service. The report map used is
 for a generic mouse.
 
+In the default configuration the sample uses passkey authentication (displays a
+code on the peripheral and requires that to be entered on the host during
+pairing) and requires an authenticated link to access the GATT characteristics.
+To disable authentication and just use encrypted channels instead, build the
+sample with `CONFIG_SAMPLE_BT_USE_AUTHENTICATION=n`.
 
 Requirements
 ************
diff --git a/samples/bluetooth/peripheral_hids/sample.yaml b/samples/bluetooth/peripheral_hids/sample.yaml
index 5dd680aa41..1c73ba4e45 100644
--- a/samples/bluetooth/peripheral_hids/sample.yaml
+++ b/samples/bluetooth/peripheral_hids/sample.yaml
@@ -8,3 +8,11 @@ tests:
     tags: bluetooth
     integration_platforms:
       - qemu_cortex_m3
+  sample.bluetooth.peripheral_hids.no_authentication:
+    harness: bluetooth
+    extra_configs:
+      - CONFIG_SAMPLE_BT_USE_AUTHENTICATION=n
+    platform_allow: qemu_cortex_m3 qemu_x86
+    tags: bluetooth
+    integration_platforms:
+      - qemu_cortex_m3
diff --git a/samples/bluetooth/peripheral_hids/src/hog.c b/samples/bluetooth/peripheral_hids/src/hog.c
index be8104c33b..cf67521517 100644
--- a/samples/bluetooth/peripheral_hids/src/hog.c
+++ b/samples/bluetooth/peripheral_hids/src/hog.c
@@ -141,6 +141,16 @@ static ssize_t write_ctrl_point(struct bt_conn *conn,
 	return len;
 }
 
+#if CONFIG_SAMPLE_BT_USE_AUTHENTICATION
+/* Require encryption using authenticated link-key. */
+#define SAMPLE_BT_PERM_READ BT_GATT_PERM_READ_AUTHEN
+#define SAMPLE_BT_PERM_WRITE BT_GATT_PERM_WRITE_AUTHEN
+#else
+/* Require encryption. */
+#define SAMPLE_BT_PERM_READ BT_GATT_PERM_READ_ENCRYPT
+#define SAMPLE_BT_PERM_WRITE BT_GATT_PERM_WRITE_ENCRYPT
+#endif
+
 /* HID Service Declaration */
 BT_GATT_SERVICE_DEFINE(hog_svc,
 	BT_GATT_PRIMARY_SERVICE(BT_UUID_HIDS),
@@ -150,10 +160,10 @@ BT_GATT_SERVICE_DEFINE(hog_svc,
 			       BT_GATT_PERM_READ, read_report_map, NULL, NULL),
 	BT_GATT_CHARACTERISTIC(BT_UUID_HIDS_REPORT,
 			       BT_GATT_CHRC_READ | BT_GATT_CHRC_NOTIFY,
-			       BT_GATT_PERM_READ_AUTHEN,
+			       SAMPLE_BT_PERM_READ,
 			       read_input_report, NULL, NULL),
 	BT_GATT_CCC(input_ccc_changed,
-		    BT_GATT_PERM_READ_AUTHEN | BT_GATT_PERM_WRITE_AUTHEN),
+		    SAMPLE_BT_PERM_READ | SAMPLE_BT_PERM_WRITE),
 	BT_GATT_DESCRIPTOR(BT_UUID_HIDS_REPORT_REF, BT_GATT_PERM_READ,
 			   read_report, NULL, &input),
 	BT_GATT_CHARACTERISTIC(BT_UUID_HIDS_CTRL_POINT,
diff --git a/samples/bluetooth/peripheral_hids/src/main.c b/samples/bluetooth/peripheral_hids/src/main.c
index 52067c4776..111b4957ac 100644
--- a/samples/bluetooth/peripheral_hids/src/main.c
+++ b/samples/bluetooth/peripheral_hids/src/main.c
@@ -137,7 +137,10 @@ void main(void)
 		return;
 	}
 
-	bt_conn_auth_cb_register(&auth_cb_display);
+	if (IS_ENABLED(CONFIG_SAMPLE_BT_USE_AUTHENTICATION)) {
+		bt_conn_auth_cb_register(&auth_cb_display);
+		printk("Bluetooth authentication callbacks registered.\n");
+	}
 
 	hog_button_loop();
 }