diff --git a/kernel/CMakeLists.txt b/kernel/CMakeLists.txt
index 8906da2f62725..b9e0574ba3694 100644
--- a/kernel/CMakeLists.txt
+++ b/kernel/CMakeLists.txt
@@ -195,6 +195,11 @@ target_link_libraries(kernel zephyr_interface)
 
 endif()
 
+# Optionally build kernel sources without LTO
+if(CONFIG_KERNEL_NO_LTO)
+  include(${CMAKE_CURRENT_LIST_DIR}/kernel_no_lto.cmake)
+endif()
+
 add_dependencies(kernel zephyr_generated_headers)
 
 unset(libkernel)
diff --git a/kernel/Kconfig b/kernel/Kconfig
index 9e3be0b12abe4..f2cfdd62a3d59 100644
--- a/kernel/Kconfig
+++ b/kernel/Kconfig
@@ -1138,6 +1138,19 @@ endif # BOOTARGS
 
 endmenu
 
+config KERNEL_NO_LTO
+	bool "Build selected kernel core files without LTO"
+	depends on LTO
+	depends on XIP
+	help
+	  Some SoCs require kernel code to be placed in RAM, which makes link-time
+	  optimization (LTO) unsuitable for these files (-fno-lto). Disabling LTO
+	  allows the affected code to be linked as separate objects and placed in
+	  specific memory regions.
+
+	  Running kernel code from RAM can improve execution performance, especially
+	  for timing-critical routines or context switch paths.
+
 rsource "Kconfig.device"
 rsource "Kconfig.vm"
 rsource "Kconfig.init"
diff --git a/kernel/kernel_no_lto.cmake b/kernel/kernel_no_lto.cmake
new file mode 100644
index 0000000000000..48b6abb47969e
--- /dev/null
+++ b/kernel/kernel_no_lto.cmake
@@ -0,0 +1,50 @@
+# Copyright (c) 2025 ITE Corporation. All Rights Reserved.
+# SPDX-License-Identifier: Apache-2.0
+
+# Optional script to disable LTO for kernel files
+
+message(STATUS "[no-LTO] Building kernel files without LTO")
+
+# Retrieve all source files from the kernel library target
+if(TARGET kernel)
+  get_property(KERNEL_SRCS TARGET kernel PROPERTY SOURCES)
+else()
+  message(WARNING "[no-LTO] kernel target not found, skipping")
+  return()
+endif()
+
+# Check if there is a permitted kernel file that can enable LTO
+if(COMMAND kernel_lto_allow_list)
+  kernel_lto_allow_list(ADDITIONAL_ALLOWLIST)
+endif()
+
+# Default LTO allowlist
+set(DEFAULT_LTO_ALLOWLIST init.c errno.c fatal.c)
+# Append LTO allowlist
+list(APPEND DEFAULT_LTO_ALLOWLIST ${ADDITIONAL_ALLOWLIST})
+# Setting LTO allowlist
+set(LTO_ALLOWLIST ${DEFAULT_LTO_ALLOWLIST})
+
+# Apply -fno-lto to all C source files, except for some initialization files
+# (e.g. init.c, errno.c, fatal.c) and those that are less critical to be
+# executed in RAM. These files can be excluded from -fno-lto by using
+# ADDITIONAL_ALLOWLIST.
+foreach(src ${KERNEL_SRCS})
+  if(src MATCHES "\\.c$")
+
+    # Skip if filename matches any in allowlist
+    set(skip FALSE)
+    foreach(allow ${LTO_ALLOWLIST})
+      get_filename_component(basename ${src} NAME)
+      if("${basename}" STREQUAL "${allow}")
+        set(skip TRUE)
+        break()
+      endif()
+    endforeach()
+
+    if(NOT skip)
+      set_source_files_properties(${src} PROPERTIES COMPILE_FLAGS "-fno-lto -g")
+    endif()
+
+  endif()
+endforeach()
diff --git a/soc/ite/ec/it8xxx2/Kconfig b/soc/ite/ec/it8xxx2/Kconfig
index 5531371682b57..a520104126ff9 100644
--- a/soc/ite/ec/it8xxx2/Kconfig
+++ b/soc/ite/ec/it8xxx2/Kconfig
@@ -228,6 +228,7 @@ config SOC_IT8XXX2_KERNEL_IN_RAM
 	bool "Place kernel handling code in RAM"
 	select SOC_IT8XXX2_USE_ILM
 	select SOC_IT8XXX2_LIBRARY_TO_RAM
+	select KERNEL_NO_LTO if LTO
 	help
 	  Place kernel handling code in ILM. This can significantly improve performance.