diff --git a/builtin/providers/azurerm/resource_arm_storage_account.go b/builtin/providers/azurerm/resource_arm_storage_account.go
index fadfd075a..a510f33b0 100644
--- a/builtin/providers/azurerm/resource_arm_storage_account.go
+++ b/builtin/providers/azurerm/resource_arm_storage_account.go
@@ -14,6 +14,10 @@ import (
 	"github.com/hashicorp/terraform/helper/signalwrapper"
 )
 
+// The KeySource of storage.Encryption appears to require this value
+// for Encryption services to work
+var storageAccountEncryptionSource = "Microsoft.Storage"
+
 func resourceArmStorageAccount() *schema.Resource {
 	return &schema.Resource{
 		Create: resourceArmStorageAccountCreate,
@@ -51,6 +55,11 @@ func resourceArmStorageAccount() *schema.Resource {
 				ValidateFunc: validateArmStorageAccountType,
 			},
 
+			"enable_blob_encryption": {
+				Type:     schema.TypeBool,
+				Optional: true,
+			},
+
 			"primary_location": {
 				Type:     schema.TypeString,
 				Computed: true,
@@ -121,6 +130,7 @@ func resourceArmStorageAccountCreate(d *schema.ResourceData, meta interface{}) e
 	accountType := d.Get("account_type").(string)
 	location := d.Get("location").(string)
 	tags := d.Get("tags").(map[string]interface{})
+	enableBlobEncryption := d.Get("enable_blob_encryption").(bool)
 
 	sku := storage.Sku{
 		Name: storage.SkuName(accountType),
@@ -130,6 +140,16 @@ func resourceArmStorageAccountCreate(d *schema.ResourceData, meta interface{}) e
 		Location: &location,
 		Sku:      &sku,
 		Tags:     expandTags(tags),
+		Properties: &storage.AccountPropertiesCreateParameters{
+			Encryption: &storage.Encryption{
+				Services: &storage.EncryptionServices{
+					Blob: &storage.EncryptionService{
+						Enabled: &enableBlobEncryption,
+					},
+				},
+				KeySource: &storageAccountEncryptionSource,
+			},
+		},
 	}
 
 	// Create the storage account. We wrap this so that it is cancellable
@@ -240,6 +260,29 @@ func resourceArmStorageAccountUpdate(d *schema.ResourceData, meta interface{}) e
 		d.SetPartial("tags")
 	}
 
+	if d.HasChange("enable_blob_encryption") {
+		enableBlobEncryption := d.Get("enable_blob_encryption").(bool)
+
+		opts := storage.AccountUpdateParameters{
+			Properties: &storage.AccountPropertiesUpdateParameters{
+				Encryption: &storage.Encryption{
+					Services: &storage.EncryptionServices{
+						Blob: &storage.EncryptionService{
+							Enabled: &enableBlobEncryption,
+						},
+					},
+					KeySource: &storageAccountEncryptionSource,
+				},
+			},
+		}
+		_, err := client.Update(resourceGroupName, storageAccountName, opts)
+		if err != nil {
+			return fmt.Errorf("Error updating Azure Storage Account enable_blob_encryption %q: %s", storageAccountName, err)
+		}
+
+		d.SetPartial("enable_blob_encryption")
+	}
+
 	d.Partial(false)
 	return nil
 }
@@ -301,6 +344,12 @@ func resourceArmStorageAccountRead(d *schema.ResourceData, meta interface{}) err
 		}
 	}
 
+	if resp.Properties.Encryption != nil {
+		if resp.Properties.Encryption.Services.Blob != nil {
+			d.Set("enable_blob_encryption", resp.Properties.Encryption.Services.Blob.Enabled)
+		}
+	}
+
 	d.Set("name", resp.Name)
 
 	flattenAndSetTags(d, resp.Tags)
diff --git a/builtin/providers/azurerm/resource_arm_storage_account_test.go b/builtin/providers/azurerm/resource_arm_storage_account_test.go
index 156734dc8..96ad286a6 100644
--- a/builtin/providers/azurerm/resource_arm_storage_account_test.go
+++ b/builtin/providers/azurerm/resource_arm_storage_account_test.go
@@ -109,6 +109,36 @@ func TestAccAzureRMStorageAccount_disappears(t *testing.T) {
 	})
 }
 
+func TestAccAzureRMStorageAccount_blobEncryption(t *testing.T) {
+	ri := acctest.RandInt()
+	rs := acctest.RandString(4)
+	preConfig := fmt.Sprintf(testAccAzureRMStorageAccount_blobEncryption, ri, rs)
+	postConfig := fmt.Sprintf(testAccAzureRMStorageAccount_blobEncryptionDisabled, ri, rs)
+
+	resource.Test(t, resource.TestCase{
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMStorageAccountDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: preConfig,
+				Check: resource.ComposeTestCheckFunc(
+					testCheckAzureRMStorageAccountExists("azurerm_storage_account.testsa"),
+					resource.TestCheckResourceAttr("azurerm_storage_account.testsa", "enable_blob_encryption", "true"),
+				),
+			},
+
+			resource.TestStep{
+				Config: postConfig,
+				Check: resource.ComposeTestCheckFunc(
+					testCheckAzureRMStorageAccountExists("azurerm_storage_account.testsa"),
+					resource.TestCheckResourceAttr("azurerm_storage_account.testsa", "enable_blob_encryption", "false"),
+				),
+			},
+		},
+	})
+}
+
 func testCheckAzureRMStorageAccountExists(name string) resource.TestCheckFunc {
 	return func(s *terraform.State) error {
 		// Ensure we have enough information in state to look up in API
@@ -218,3 +248,41 @@ resource "azurerm_storage_account" "testsa" {
         environment = "staging"
     }
 }`
+
+var testAccAzureRMStorageAccount_blobEncryption = `
+resource "azurerm_resource_group" "testrg" {
+    name = "testAccAzureRMSA-%d"
+    location = "westus"
+}
+
+resource "azurerm_storage_account" "testsa" {
+    name = "unlikely23exst2acct%s"
+    resource_group_name = "${azurerm_resource_group.testrg.name}"
+
+    location = "westus"
+    account_type = "Standard_LRS"
+    enable_blob_encryption = true
+
+    tags {
+        environment = "production"
+    }
+}`
+
+var testAccAzureRMStorageAccount_blobEncryptionDisabled = `
+resource "azurerm_resource_group" "testrg" {
+    name = "testAccAzureRMSA-%d"
+    location = "westus"
+}
+
+resource "azurerm_storage_account" "testsa" {
+    name = "unlikely23exst2acct%s"
+    resource_group_name = "${azurerm_resource_group.testrg.name}"
+
+    location = "westus"
+    account_type = "Standard_LRS"
+    enable_blob_encryption = false
+
+    tags {
+        environment = "production"
+    }
+}`
diff --git a/website/source/docs/providers/azurerm/r/storage_account.html.markdown b/website/source/docs/providers/azurerm/r/storage_account.html.markdown
index 5fe2c38bc..015fdd34e 100644
--- a/website/source/docs/providers/azurerm/r/storage_account.html.markdown
+++ b/website/source/docs/providers/azurerm/r/storage_account.html.markdown
@@ -51,6 +51,10 @@ The following arguments are supported:
     documentation for more information on which types of accounts can be converted
     into other types.
 
+* `enable_bool_encryption` - (Optional) Boolean flag which controls if Encryption
+    Services are enabled for Blob storage, see [here](https://azure.microsoft.com/en-us/documentation/articles/storage-service-encryption/)
+    for more information. 
+
 * `tags` - (Optional) A mapping of tags to assign to the resource.
 
 Note that although the Azure API supports setting custom domain names for