Abstract This paper introduces a key encapsulation mechanism based on polar codes, called as KEM‐PC, with secure and efficient key generation, encapsulation and decapsulation algorithms. In the proposed KEM‐PC, the ephemeral public encapsulation and secret decapsulation keys, which are generated at each key exchange session, are employed. By introducing secure polar coding and exploiting the characteristics of polar codes, the ephemeral secret decapsulation key size is reduced. Also, by exploiting the secure polar encoding, KEM‐PC has a proper security level against information set decoding and indistinguishable chosen plaintext attack. In fact, decreasing the ephemeral secret decapsulation key size of KEM‐PC has no impact on its security level. Moreover, the proposed KEM‐PC has a potential to be exploited in an authenticated key exchange protocol. The aforementioned properties make the proposed KEM‐PC usable in secure communication devices.