Method and apparatus for network level protocol negotiation for Internet Protocol Security (IPSec) and Internet Protocol Payload Compression (IPComp) are described. More particularly, IPSec and IPComp capabilities are instantiated in a network processor unit of a network interface in at least two communicating computers. By determining each computer has the capacity to due IPSec and IPComp at the transport level, such is negotiated and executed at the transport level independently of an operating system and a central processing unit usage. Additionally, encryption and/or compression are done at the network level operating system and central processing unit offloading.