diff --git a/changelogs/fragments/867-passphrase-encoding-nolog.yml b/changelogs/fragments/867-passphrase-encoding-nolog.yml
new file mode 100644
index 00000000..fa7ceb1e
--- /dev/null
+++ b/changelogs/fragments/867-passphrase-encoding-nolog.yml
@@ -0,0 +1,2 @@
+bugfixes:
+  - "luks_device - mark parameter ``passphrase_encoding`` as ``no_log=False`` to avoid confusing warning (https://github.com/ansible-collections/community.crypto/pull/867)."
diff --git a/plugins/modules/luks_device.py b/plugins/modules/luks_device.py
index 744b19a5..728a3c05 100644
--- a/plugins/modules/luks_device.py
+++ b/plugins/modules/luks_device.py
@@ -990,7 +990,7 @@ def run_module():
         passphrase=dict(type='str', no_log=True),
         new_passphrase=dict(type='str', no_log=True),
         remove_passphrase=dict(type='str', no_log=True),
-        passphrase_encoding=dict(type='str', default='text', choices=['text', 'base64']),
+        passphrase_encoding=dict(type='str', default='text', choices=['text', 'base64'], no_log=False),
         keyslot=dict(type='int', no_log=False),
         new_keyslot=dict(type='int', no_log=False),
         remove_keyslot=dict(type='int', no_log=False),