diff --git a/pom.xml b/pom.xml
index 366786fc6d..d97c844245 100644
--- a/pom.xml
+++ b/pom.xml
@@ -5,7 +5,7 @@
 
 	<groupId>org.springframework.data</groupId>
 	<artifactId>spring-data-mongodb-parent</artifactId>
-	<version>4.2.0-SNAPSHOT</version>
+	<version>4.2.x-4454-SNAPSHOT</version>
 	<packaging>pom</packaging>
 
 	<name>Spring Data MongoDB</name>
diff --git a/spring-data-mongodb-benchmarks/pom.xml b/spring-data-mongodb-benchmarks/pom.xml
index 2de4b6b635..9c01922aac 100644
--- a/spring-data-mongodb-benchmarks/pom.xml
+++ b/spring-data-mongodb-benchmarks/pom.xml
@@ -7,7 +7,7 @@
 	<parent>
 		<groupId>org.springframework.data</groupId>
 		<artifactId>spring-data-mongodb-parent</artifactId>
-		<version>4.2.0-SNAPSHOT</version>
+		<version>4.2.x-4454-SNAPSHOT</version>
 		<relativePath>../pom.xml</relativePath>
 	</parent>
 
diff --git a/spring-data-mongodb-distribution/pom.xml b/spring-data-mongodb-distribution/pom.xml
index 060a6d0dd9..9d5e043041 100644
--- a/spring-data-mongodb-distribution/pom.xml
+++ b/spring-data-mongodb-distribution/pom.xml
@@ -15,7 +15,7 @@
 	<parent>
 		<groupId>org.springframework.data</groupId>
 		<artifactId>spring-data-mongodb-parent</artifactId>
-		<version>4.2.0-SNAPSHOT</version>
+		<version>4.2.x-4454-SNAPSHOT</version>
 		<relativePath>../pom.xml</relativePath>
 	</parent>
 
diff --git a/spring-data-mongodb/pom.xml b/spring-data-mongodb/pom.xml
index dc07f13ccc..ef305e5431 100644
--- a/spring-data-mongodb/pom.xml
+++ b/spring-data-mongodb/pom.xml
@@ -13,7 +13,7 @@
 	<parent>
 		<groupId>org.springframework.data</groupId>
 		<artifactId>spring-data-mongodb-parent</artifactId>
-		<version>4.2.0-SNAPSHOT</version>
+		<version>4.2.x-4454-SNAPSHOT</version>
 		<relativePath>../pom.xml</relativePath>
 	</parent>
 
diff --git a/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreator.java b/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreator.java
index 0265382c4d..33bbec8a7a 100644
--- a/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreator.java
+++ b/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreator.java
@@ -203,8 +203,9 @@ private JsonSchemaProperty computeSchemaForProperty(List<MongoPersistentProperty
 								target.properties(nestedProperties.toArray(new JsonSchemaProperty[0])), required));
 					}
 				}
-				return targetProperties.size() == 1 ? targetProperties.iterator().next()
+				JsonSchemaProperty schemaProperty = targetProperties.size() == 1 ? targetProperties.iterator().next()
 						: JsonSchemaProperty.merged(targetProperties);
+				return applyEncryptionDataIfNecessary(property, schemaProperty);
 			}
 		}
 
diff --git a/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/schema/IdentifiableJsonSchemaProperty.java b/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/schema/IdentifiableJsonSchemaProperty.java
index 3713a61a3c..9a4466916a 100644
--- a/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/schema/IdentifiableJsonSchemaProperty.java
+++ b/spring-data-mongodb/src/main/java/org/springframework/data/mongodb/core/schema/IdentifiableJsonSchemaProperty.java
@@ -36,6 +36,7 @@
 import org.springframework.lang.Nullable;
 import org.springframework.util.Assert;
 import org.springframework.util.ObjectUtils;
+import org.springframework.util.StringUtils;
 
 /**
  * {@link JsonSchemaProperty} implementation.
@@ -1139,7 +1140,9 @@ public Document toDocument() {
 				enc.append("bsonType", type.toBsonType().value()); // TODO: no samples with type -> is it bson type all the way?
 			}
 
-			enc.append("algorithm", algorithm);
+			if (StringUtils.hasText(algorithm)) {
+				enc.append("algorithm", algorithm);
+			}
 
 			propertySpecification.append("encrypt", enc);
 
diff --git a/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreatorUnitTests.java b/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreatorUnitTests.java
index 2b33682757..ac2fd8a945 100644
--- a/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreatorUnitTests.java
+++ b/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MappingMongoJsonSchemaCreatorUnitTests.java
@@ -271,6 +271,17 @@ void bsonTypeVsJustTypeValueResolutionIsDoneByDefault() {
 				.containsEntry("properties.value", new Document("type", "string"));
 	}
 
+	@Test // GH-4454
+	void wrapEncryptedEntityTypeLikeProperty() {
+
+		MongoJsonSchema schema = MongoJsonSchemaCreator.create() //
+				.filter(MongoJsonSchemaCreator.encryptedOnly()) // filter non encrypted fields
+				.createSchemaFor(WithEncryptedEntityLikeProperty.class);
+
+		assertThat(schema.schemaDocument()) //
+				.containsEntry("properties.domainTypeValue", Document.parse("{'encrypt': {'bsonType': 'object' } }"));
+	}
+
 	// --> TYPES AND JSON
 
 	// --> ENUM
@@ -676,4 +687,9 @@ static class C extends A {
 	static class PropertyClashWithA {
 		Integer aNonEncrypted;
 	}
+
+	@Encrypted(algorithm = "AEAD_AES_256_CBC_HMAC_SHA_512-Deterministic")
+	static class WithEncryptedEntityLikeProperty {
+		@Encrypted SomeDomainType domainTypeValue;
+	}
 }
diff --git a/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MongoTemplateValidationTests.java b/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MongoTemplateValidationTests.java
index fd5036884b..f375ebeac0 100644
--- a/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MongoTemplateValidationTests.java
+++ b/spring-data-mongodb/src/test/java/org/springframework/data/mongodb/core/MongoTemplateValidationTests.java
@@ -33,8 +33,10 @@
 import org.springframework.dao.DataIntegrityViolationException;
 import org.springframework.data.mongodb.config.AbstractMongoClientConfiguration;
 import org.springframework.data.mongodb.core.CollectionOptions.ValidationOptions;
+import org.springframework.data.mongodb.core.mapping.Encrypted;
 import org.springframework.data.mongodb.core.mapping.Field;
 import org.springframework.data.mongodb.core.query.Criteria;
+import org.springframework.data.mongodb.core.schema.MongoJsonSchema;
 import org.springframework.data.mongodb.test.util.Client;
 import org.springframework.data.mongodb.test.util.MongoClientExtension;
 import org.springframework.lang.Nullable;
@@ -46,11 +48,13 @@
 
 /**
  * Integration tests for {@link CollectionOptions#validation(ValidationOptions)} using
- * {@link org.springframework.data.mongodb.core.validation.CriteriaValidator} and
- * {@link org.springframework.data.mongodb.core.validation.DocumentValidator}.
+ * {@link org.springframework.data.mongodb.core.validation.CriteriaValidator},
+ * {@link org.springframework.data.mongodb.core.validation.DocumentValidator} and
+ * {@link org.springframework.data.mongodb.core.validation.JsonSchemaValidator}.
  *
  * @author Andreas Zink
  * @author Christoph Strobl
+ * @author Julia Lee
  */
 @ExtendWith({ MongoClientExtension.class, SpringExtension.class })
 public class MongoTemplateValidationTests {
@@ -186,6 +190,20 @@ public void mapsDocumentValidatorFieldsCorrectly() {
 		assertThat(getValidatorInfo(COLLECTION_NAME)).isEqualTo(new Document("customName", new Document("$type", "bool")));
 	}
 
+	@Test // GH-4454
+	public void failsJsonSchemaValidationForEncryptedDomainEntityProperty() {
+
+		MongoJsonSchema schema = MongoJsonSchemaCreator.create().createSchemaFor(BeanWithEncryptedDomainEntity.class);
+		template.createCollection(COLLECTION_NAME, CollectionOptions.empty().schema(schema));
+
+		BeanWithEncryptedDomainEntity person = new BeanWithEncryptedDomainEntity();
+		person.encryptedDomainEntity = new SimpleBean("some string", 100, null);
+
+		assertThatExceptionOfType(DataIntegrityViolationException.class)
+			.isThrownBy(() -> template.save(person))
+			.withMessageContaining("Document failed validation");
+	}
+
 	private Document getCollectionOptions(String collectionName) {
 		return getCollectionInfo(collectionName).get("options", Document.class);
 	}
@@ -271,4 +289,10 @@ public String toString() {
 			return "MongoTemplateValidationTests.SimpleBean(nonNullString=" + this.getNonNullString() + ", rangedInteger=" + this.getRangedInteger() + ", customFieldName=" + this.getCustomFieldName() + ")";
 		}
 	}
+
+	@org.springframework.data.mongodb.core.mapping.Document(collection = COLLECTION_NAME)
+	@Encrypted(algorithm = "AEAD_AES_256_CBC_HMAC_SHA_512-Deterministic")
+	static class BeanWithEncryptedDomainEntity {
+		@Encrypted SimpleBean encryptedDomainEntity;
+	}
 }