diff --git a/CODEOWNERS b/CODEOWNERS
index d26e153c1a..03e26bcb84 100644
--- a/CODEOWNERS
+++ b/CODEOWNERS
@@ -499,5 +499,6 @@ esphome/components/xiaomi_mhoc401/* @vevsvevs
 esphome/components/xiaomi_rtcgq02lm/* @jesserockz
 esphome/components/xl9535/* @mreditor97
 esphome/components/xpt2046/touchscreen/* @nielsnl68 @numo68
+esphome/components/xxtea/* @clydebarrow
 esphome/components/zhlt01/* @cfeenstra1024
 esphome/components/zio_ultrasonic/* @kahrendt
diff --git a/esphome/components/udp/__init__.py b/esphome/components/udp/__init__.py
index 5485663f1c..140d1e4236 100644
--- a/esphome/components/udp/__init__.py
+++ b/esphome/components/udp/__init__.py
@@ -18,7 +18,7 @@ from esphome.cpp_generator import MockObjClass
 
 CODEOWNERS = ["@clydebarrow"]
 DEPENDENCIES = ["network"]
-AUTO_LOAD = ["socket"]
+AUTO_LOAD = ["socket", "xxtea"]
 MULTI_CONF = True
 
 udp_ns = cg.esphome_ns.namespace("udp")
diff --git a/esphome/components/udp/udp_component.cpp b/esphome/components/udp/udp_component.cpp
index 30f7356879..59cba8c7fe 100644
--- a/esphome/components/udp/udp_component.cpp
+++ b/esphome/components/udp/udp_component.cpp
@@ -3,6 +3,8 @@
 #include "esphome/components/network/util.h"
 #include "udp_component.h"
 
+#include "esphome/components/xxtea/xxtea.h"
+
 namespace esphome {
 namespace udp {
 
@@ -47,54 +49,7 @@ namespace udp {
  */
 static const char *const TAG = "udp";
 
-/**
- * XXTEA implementation, using 256 bit key.
- */
-
-static const uint32_t DELTA = 0x9e3779b9;
-#define MX ((((z >> 5) ^ (y << 2)) + ((y >> 3) ^ (z << 4))) ^ ((sum ^ y) + (k[(p ^ e) & 7] ^ z)))
-
-/**
- * Encrypt a block of data in-place
- */
-
-static void xxtea_encrypt(uint32_t *v, size_t n, const uint32_t *k) {
-  uint32_t z, y, sum, e;
-  size_t p;
-  size_t q = 6 + 52 / n;
-  sum = 0;
-  z = v[n - 1];
-  while (q-- != 0) {
-    sum += DELTA;
-    e = (sum >> 2);
-    for (p = 0; p != n - 1; p++) {
-      y = v[p + 1];
-      z = v[p] += MX;
-    }
-    y = v[0];
-    z = v[n - 1] += MX;
-  }
-}
-
-static void xxtea_decrypt(uint32_t *v, size_t n, const uint32_t *k) {
-  uint32_t z, y, sum, e;
-  size_t p;
-  size_t q = 6 + 52 / n;
-  sum = q * DELTA;
-  y = v[0];
-  while (q-- != 0) {
-    e = (sum >> 2);
-    for (p = n - 1; p != 0; p--) {
-      z = v[p - 1];
-      y = v[p] -= MX;
-    }
-    z = v[n - 1];
-    y = v[0] -= MX;
-    sum -= DELTA;
-  }
-}
-
-inline static size_t round4(size_t value) { return (value + 3) & ~3; }
+static size_t round4(size_t value) { return (value + 3) & ~3; }
 
 union FuData {
   uint32_t u32;
@@ -312,7 +267,7 @@ void UDPComponent::flush_() {
   memcpy(buffer, this->header_.data(), this->header_.size());
   memcpy(buffer + header_len, this->data_.data(), this->data_.size());
   if (this->is_encrypted_()) {
-    xxtea_encrypt(buffer + header_len, len, (uint32_t *) this->encryption_key_.data());
+    xxtea::encrypt(buffer + header_len, len, (uint32_t *) this->encryption_key_.data());
   }
   auto total_len = (header_len + len) * 4;
   this->send_packet_(buffer, total_len);
@@ -503,7 +458,7 @@ void UDPComponent::process_(uint8_t *buf, const size_t len) {
 #endif
 
   if (!provider.encryption_key.empty()) {
-    xxtea_decrypt((uint32_t *) buf, (end - buf) / 4, (uint32_t *) provider.encryption_key.data());
+    xxtea::decrypt((uint32_t *) buf, (end - buf) / 4, (uint32_t *) provider.encryption_key.data());
   }
   byte = *buf++;
   if (byte == ROLLING_CODE_KEY) {
diff --git a/esphome/components/xxtea/__init__.py b/esphome/components/xxtea/__init__.py
new file mode 100644
index 0000000000..7a7bce1781
--- /dev/null
+++ b/esphome/components/xxtea/__init__.py
@@ -0,0 +1,3 @@
+"""ESPHome XXTEA encryption component."""
+
+CODEOWNERS = ["@clydebarrow"]
diff --git a/esphome/components/xxtea/xxtea.cpp b/esphome/components/xxtea/xxtea.cpp
new file mode 100644
index 0000000000..aae663ee01
--- /dev/null
+++ b/esphome/components/xxtea/xxtea.cpp
@@ -0,0 +1,46 @@
+#include "xxtea.h"
+
+namespace esphome {
+namespace xxtea {
+
+static const uint32_t DELTA = 0x9e3779b9;
+#define MX ((((z >> 5) ^ (y << 2)) + ((y >> 3) ^ (z << 4))) ^ ((sum ^ y) + (k[(p ^ e) & 7] ^ z)))
+
+void encrypt(uint32_t *v, size_t n, const uint32_t *k) {
+  uint32_t z, y, sum, e;
+  size_t p;
+  size_t q = 6 + 52 / n;
+  sum = 0;
+  z = v[n - 1];
+  while (q-- != 0) {
+    sum += DELTA;
+    e = (sum >> 2);
+    for (p = 0; p != n - 1; p++) {
+      y = v[p + 1];
+      z = v[p] += MX;
+    }
+    y = v[0];
+    z = v[n - 1] += MX;
+  }
+}
+
+void decrypt(uint32_t *v, size_t n, const uint32_t *k) {
+  uint32_t z, y, sum, e;
+  size_t p;
+  size_t q = 6 + 52 / n;
+  sum = q * DELTA;
+  y = v[0];
+  while (q-- != 0) {
+    e = (sum >> 2);
+    for (p = n - 1; p != 0; p--) {
+      z = v[p - 1];
+      y = v[p] -= MX;
+    }
+    z = v[n - 1];
+    y = v[0] -= MX;
+    sum -= DELTA;
+  }
+}
+
+}  // namespace xxtea
+}  // namespace esphome
diff --git a/esphome/components/xxtea/xxtea.h b/esphome/components/xxtea/xxtea.h
new file mode 100644
index 0000000000..86afbd1d46
--- /dev/null
+++ b/esphome/components/xxtea/xxtea.h
@@ -0,0 +1,26 @@
+#pragma once
+
+#include <cstdint>
+#include <cstddef>
+
+namespace esphome {
+namespace xxtea {
+
+/**
+ * Encrypt a block of data in-place using XXTEA algorithm with 256-bit key
+ * @param v Data to encrypt (as array of 32-bit words)
+ * @param n Number of 32-bit words in data
+ * @param k Key (array of 8 32-bit words)
+ */
+void encrypt(uint32_t *v, size_t n, const uint32_t *k);
+
+/**
+ * Decrypt a block of data in-place using XXTEA algorithm with 256-bit key
+ * @param v Data to decrypt (as array of 32-bit words)
+ * @param n Number of 32-bit words in data
+ * @param k Key (array of 8 32-bit words)
+ */
+void decrypt(uint32_t *v, size_t n, const uint32_t *k);
+
+}  // namespace xxtea
+}  // namespace esphome