diff --git a/include/zephyr/bluetooth/audio/audio.h b/include/zephyr/bluetooth/audio/audio.h
index cc722f44e32..c8d74688ed8 100644
--- a/include/zephyr/bluetooth/audio/audio.h
+++ b/include/zephyr/bluetooth/audio/audio.h
@@ -1935,7 +1935,7 @@ int bt_audio_stream_release(struct bt_audio_stream *stream);
  *  @return Bytes sent in case of success or negative value in case of error.
  */
 int bt_audio_stream_send(struct bt_audio_stream *stream, struct net_buf *buf,
-			 uint32_t seq_num, uint32_t ts);
+			 uint16_t seq_num, uint32_t ts);
 
 /** @brief Parameter struct for the unicast group functions
  *
diff --git a/include/zephyr/bluetooth/iso.h b/include/zephyr/bluetooth/iso.h
index f39e3c72c21..fb9963e31fb 100644
--- a/include/zephyr/bluetooth/iso.h
+++ b/include/zephyr/bluetooth/iso.h
@@ -677,7 +677,7 @@ int bt_iso_chan_disconnect(struct bt_iso_chan *chan);
  *  @return Bytes sent in case of success or negative value in case of error.
  */
 int bt_iso_chan_send(struct bt_iso_chan *chan, struct net_buf *buf,
-		     uint32_t seq_num, uint32_t ts);
+		     uint16_t seq_num, uint32_t ts);
 
 struct bt_iso_unicast_tx_info {
 	/** The transport latency in us */
diff --git a/samples/bluetooth/broadcast_audio_source/src/main.c b/samples/bluetooth/broadcast_audio_source/src/main.c
index ece1d0ef9d2..b5529b494b4 100644
--- a/samples/bluetooth/broadcast_audio_source/src/main.c
+++ b/samples/bluetooth/broadcast_audio_source/src/main.c
@@ -27,7 +27,7 @@ NET_BUF_POOL_FIXED_DEFINE(tx_pool,
 			  TOTAL_BUF_NEEDED,
 			  BT_ISO_SDU_BUF_SIZE(CONFIG_BT_ISO_TX_MTU), 8, NULL);
 static uint8_t mock_data[CONFIG_BT_ISO_TX_MTU];
-static uint32_t seq_num;
+static uint16_t seq_num;
 static bool stopping;
 
 static K_SEM_DEFINE(sem_started, 0U, ARRAY_SIZE(streams));
diff --git a/samples/bluetooth/central_iso/src/main.c b/samples/bluetooth/central_iso/src/main.c
index d33e3fa9a21..336ff918150 100644
--- a/samples/bluetooth/central_iso/src/main.c
+++ b/samples/bluetooth/central_iso/src/main.c
@@ -24,7 +24,7 @@ static void start_scan(void);
 static struct bt_conn *default_conn;
 static struct k_work_delayable iso_send_work;
 static struct bt_iso_chan iso_chan;
-static uint32_t seq_num;
+static uint16_t seq_num;
 static uint32_t interval_us = 10U * USEC_PER_MSEC; /* 10 ms */
 NET_BUF_POOL_FIXED_DEFINE(tx_pool, 1, BT_ISO_SDU_BUF_SIZE(CONFIG_BT_ISO_TX_MTU), 8,
 			  NULL);
diff --git a/samples/bluetooth/hap_ha/src/bap_unicast_sr.c b/samples/bluetooth/hap_ha/src/bap_unicast_sr.c
index 4bc4163dce4..0def2418c45 100644
--- a/samples/bluetooth/hap_ha/src/bap_unicast_sr.c
+++ b/samples/bluetooth/hap_ha/src/bap_unicast_sr.c
@@ -31,14 +31,14 @@ static struct k_work_delayable audio_send_work;
 static struct bt_audio_stream streams[CONFIG_BT_ASCS_ASE_SNK_COUNT + CONFIG_BT_ASCS_ASE_SRC_COUNT];
 static struct bt_audio_source {
 	struct bt_audio_stream *stream;
-	uint32_t seq_num;
+	uint16_t seq_num;
 } source_streams[CONFIG_BT_ASCS_ASE_SRC_COUNT];
 static size_t configured_source_stream_count;
 
 static const struct bt_codec_qos_pref qos_pref = BT_CODEC_QOS_PREF(true, BT_GAP_LE_PHY_2M, 0x02,
 								   10, 20000, 40000, 20000, 40000);
 
-static uint32_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
+static uint16_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
 {
 	for (size_t i = 0U; i < configured_source_stream_count; i++) {
 		if (stream == source_streams[i].stream) {
diff --git a/samples/bluetooth/iso_broadcast/src/main.c b/samples/bluetooth/iso_broadcast/src/main.c
index 711aeb39aaf..2e177b8099c 100644
--- a/samples/bluetooth/iso_broadcast/src/main.c
+++ b/samples/bluetooth/iso_broadcast/src/main.c
@@ -21,7 +21,7 @@ static K_SEM_DEFINE(sem_big_term, 0, BIS_ISO_CHAN_COUNT);
 
 #define INITIAL_TIMEOUT_COUNTER (BIG_TERMINATE_TIMEOUT_US / BIG_SDU_INTERVAL_US)
 
-static uint32_t seq_num;
+static uint16_t seq_num;
 
 static void iso_connected(struct bt_iso_chan *chan)
 {
diff --git a/samples/bluetooth/iso_broadcast_benchmark/src/broadcaster.c b/samples/bluetooth/iso_broadcast_benchmark/src/broadcaster.c
index 216dacfff37..cf35d78e30b 100644
--- a/samples/bluetooth/iso_broadcast_benchmark/src/broadcaster.c
+++ b/samples/bluetooth/iso_broadcast_benchmark/src/broadcaster.c
@@ -36,7 +36,7 @@ static uint8_t connected_bis;
 static struct bt_iso_chan bis_iso_chans[CONFIG_BT_ISO_MAX_CHAN];
 static struct bt_iso_chan *bis[CONFIG_BT_ISO_MAX_CHAN];
 /* We use a single seq_num for all the BIS as they share the same SDU interval */
-static uint32_t seq_num;
+static uint16_t seq_num;
 static struct bt_iso_big_create_param big_create_param = {
 	.num_bis = DEFAULT_BIS_COUNT,
 	.bis_channels = bis,
diff --git a/samples/bluetooth/iso_connected_benchmark/src/main.c b/samples/bluetooth/iso_connected_benchmark/src/main.c
index 7d6b370f9c8..a3382efbe6f 100644
--- a/samples/bluetooth/iso_connected_benchmark/src/main.c
+++ b/samples/bluetooth/iso_connected_benchmark/src/main.c
@@ -52,7 +52,7 @@ struct iso_chan_work {
 	struct bt_iso_chan chan;
 	struct k_work_delayable send_work;
 	struct bt_iso_info info;
-	uint32_t seq_num;
+	uint16_t seq_num;
 } iso_chans[CONFIG_BT_ISO_MAX_CHAN];
 
 static enum benchmark_role role;
diff --git a/samples/bluetooth/unicast_audio_client/src/main.c b/samples/bluetooth/unicast_audio_client/src/main.c
index 267dd608c41..00c91ef5b1c 100644
--- a/samples/bluetooth/unicast_audio_client/src/main.c
+++ b/samples/bluetooth/unicast_audio_client/src/main.c
@@ -23,7 +23,7 @@ static struct bt_audio_unicast_group *unicast_group;
 static struct bt_codec *remote_codec_capabilities[CONFIG_BT_AUDIO_UNICAST_CLIENT_PAC_COUNT];
 static struct bt_audio_sink {
 	struct bt_audio_ep *ep;
-	uint32_t seq_num;
+	uint16_t seq_num;
 } sinks[CONFIG_BT_AUDIO_UNICAST_CLIENT_ASE_SNK_COUNT];
 static struct bt_audio_ep *sources[CONFIG_BT_AUDIO_UNICAST_CLIENT_ASE_SRC_COUNT];
 NET_BUF_POOL_FIXED_DEFINE(tx_pool, CONFIG_BT_AUDIO_UNICAST_CLIENT_ASE_SNK_COUNT,
@@ -55,7 +55,7 @@ static K_SEM_DEFINE(sem_stream_qos, 0, 1);
 static K_SEM_DEFINE(sem_stream_enabled, 0, 1);
 static K_SEM_DEFINE(sem_stream_started, 0, 1);
 
-static uint32_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
+static uint16_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
 {
 	for (size_t i = 0U; i < configured_sink_stream_count; i++) {
 		if (stream->ep == sinks[i].ep) {
diff --git a/samples/bluetooth/unicast_audio_server/src/main.c b/samples/bluetooth/unicast_audio_server/src/main.c
index f0681087e98..daaa64d415e 100644
--- a/samples/bluetooth/unicast_audio_server/src/main.c
+++ b/samples/bluetooth/unicast_audio_server/src/main.c
@@ -41,7 +41,7 @@ static struct k_work_delayable audio_send_work;
 static struct bt_audio_stream streams[CONFIG_BT_ASCS_ASE_SNK_COUNT + CONFIG_BT_ASCS_ASE_SRC_COUNT];
 static struct bt_audio_source {
 	struct bt_audio_stream *stream;
-	uint32_t seq_num;
+	uint16_t seq_num;
 	uint16_t max_sdu;
 	size_t len_to_send;
 } source_streams[CONFIG_BT_ASCS_ASE_SRC_COUNT];
@@ -69,7 +69,7 @@ static const struct bt_data ad[] = {
 	BT_DATA(BT_DATA_SVC_DATA16, unicast_server_addata, ARRAY_SIZE(unicast_server_addata)),
 };
 
-static uint32_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
+static uint16_t get_and_incr_seq_num(const struct bt_audio_stream *stream)
 {
 	for (size_t i = 0U; i < configured_source_stream_count; i++) {
 		if (stream == source_streams[i].stream) {
diff --git a/subsys/bluetooth/audio/stream.c b/subsys/bluetooth/audio/stream.c
index 3a4bff0e88a..83de6119164 100644
--- a/subsys/bluetooth/audio/stream.c
+++ b/subsys/bluetooth/audio/stream.c
@@ -89,7 +89,7 @@ void bt_audio_stream_attach(struct bt_conn *conn,
 
 #if defined(CONFIG_BT_AUDIO_UNICAST) || defined(CONFIG_BT_AUDIO_BROADCAST_SOURCE)
 int bt_audio_stream_send(struct bt_audio_stream *stream, struct net_buf *buf,
-			 uint32_t seq_num, uint32_t ts)
+			 uint16_t seq_num, uint32_t ts)
 {
 	struct bt_audio_ep *ep;
 
diff --git a/subsys/bluetooth/host/conn_internal.h b/subsys/bluetooth/host/conn_internal.h
index d304b59c7b4..60ac2577bc1 100644
--- a/subsys/bluetooth/host/conn_internal.h
+++ b/subsys/bluetooth/host/conn_internal.h
@@ -125,16 +125,6 @@ struct bt_conn_iso {
 		uint8_t			bis_id;
 	};
 
-#if defined(CONFIG_BT_ISO_UNICAST) || defined(CONFIG_BT_ISO_BROADCASTER)
-	/** @brief 16-bit sequence number that shall be incremented per SDU interval
-	 *
-	 *  Stored as 32-bit to handle wrapping: Only once the value has
-	 *  become greater than 0xFFFF will values less than the
-	 *  current are allowed again.
-	 */
-	uint32_t seq_num;
-#endif /* CONFIG_BT_ISO_UNICAST) || CONFIG_BT_ISO_BROADCASTER */
-
 	/** Stored information about the ISO stream */
 	struct bt_iso_info info;
 };
diff --git a/subsys/bluetooth/host/iso.c b/subsys/bluetooth/host/iso.c
index b6fbfcd8bfd..b288d8add43 100644
--- a/subsys/bluetooth/host/iso.c
+++ b/subsys/bluetooth/host/iso.c
@@ -741,7 +741,7 @@ static uint16_t iso_chan_max_data_len(const struct bt_iso_chan *chan,
 }
 
 int bt_iso_chan_send(struct bt_iso_chan *chan, struct net_buf *buf,
-		     uint32_t seq_num, uint32_t ts)
+		     uint16_t seq_num, uint32_t ts)
 {
 	uint16_t max_data_len;
 	struct bt_conn *iso_conn;
@@ -778,19 +778,6 @@ int bt_iso_chan_send(struct bt_iso_chan *chan, struct net_buf *buf,
 		return -EMSGSIZE;
 	}
 
-	/* Once the stored seq_num reaches the maximum value sendable to the
-	 * controller (BT_ISO_MAX_SEQ_NUM) we will allow the application to wrap
-	 * it. This ensures that up to 2^32-1 SDUs can be sent without wrapping
-	 * the sequence number which should provide ample room to handle
-	 * applications that does not send an SDU every interval.
-	 */
-	if (seq_num <= iso_conn->iso.seq_num &&
-	    iso_conn->iso.seq_num < BT_ISO_MAX_SEQ_NUM) {
-		BT_DBG("Invalid seq_num %u - Shall be > than %u",
-		       seq_num, iso_conn->iso.seq_num);
-		return -EINVAL;
-	}
-
 	max_data_len = iso_chan_max_data_len(chan, ts);
 	if (buf->len > max_data_len) {
 		BT_DBG("Cannot send %u octets, maximum %u",
@@ -798,13 +785,11 @@ int bt_iso_chan_send(struct bt_iso_chan *chan, struct net_buf *buf,
 		return -EMSGSIZE;
 	}
 
-	iso_conn->iso.seq_num = seq_num;
-
 	if (ts == BT_ISO_TIMESTAMP_NONE) {
 		struct bt_hci_iso_data_hdr *hdr;
 
 		hdr = net_buf_push(buf, sizeof(*hdr));
-		hdr->sn = sys_cpu_to_le16((uint16_t)seq_num);
+		hdr->sn = sys_cpu_to_le16(seq_num);
 		hdr->slen = sys_cpu_to_le16(bt_iso_pkt_len_pack(net_buf_frags_len(buf)
 								- sizeof(*hdr),
 								BT_ISO_DATA_VALID));
@@ -813,7 +798,7 @@ int bt_iso_chan_send(struct bt_iso_chan *chan, struct net_buf *buf,
 
 		hdr = net_buf_push(buf, sizeof(*hdr));
 		hdr->ts = ts;
-		hdr->data.sn = sys_cpu_to_le16((uint16_t)seq_num);
+		hdr->data.sn = sys_cpu_to_le16(seq_num);
 		hdr->data.slen = sys_cpu_to_le16(bt_iso_pkt_len_pack(net_buf_frags_len(buf)
 								     - sizeof(*hdr),
 								     BT_ISO_DATA_VALID));
@@ -990,9 +975,6 @@ void hci_le_cis_established(struct net_buf *buf)
 
 		__ASSERT(chan != NULL && chan->qos != NULL, "Invalid ISO chan");
 
-		/* Reset sequence number */
-		iso->iso.seq_num = BT_ISO_MAX_SEQ_NUM;
-
 		tx = chan->qos->tx;
 		rx = chan->qos->rx;
 
@@ -2465,8 +2447,6 @@ void hci_le_big_complete(struct net_buf *buf)
 		const uint16_t handle = evt->handle[i++];
 		struct bt_conn *iso_conn = bis->iso;
 
-		/* Reset sequence number */
-		iso_conn->iso.seq_num = BT_ISO_MAX_SEQ_NUM;
 		iso_conn->handle = sys_le16_to_cpu(handle);
 		store_bis_broadcaster_info(evt, &iso_conn->iso.info);
 		bt_conn_set_state(iso_conn, BT_CONN_CONNECTED);
diff --git a/subsys/bluetooth/host/iso_internal.h b/subsys/bluetooth/host/iso_internal.h
index 51214c1a0a3..604c4f5ebfd 100644
--- a/subsys/bluetooth/host/iso_internal.h
+++ b/subsys/bluetooth/host/iso_internal.h
@@ -11,8 +11,6 @@
 
 #include <zephyr/bluetooth/iso.h>
 
-#define BT_ISO_MAX_SEQ_NUM 0xFFFF
-
 struct iso_data {
 	/** BT_BUF_ISO_IN */
 	uint8_t  type;
diff --git a/subsys/bluetooth/shell/audio.c b/subsys/bluetooth/shell/audio.c
index 5a9ae28c2e8..a2fa3292dd5 100644
--- a/subsys/bluetooth/shell/audio.c
+++ b/subsys/bluetooth/shell/audio.c
@@ -61,7 +61,7 @@ static struct bt_audio_stream broadcast_sink_streams[BROADCAST_SNK_STREAM_CNT];
 static struct bt_audio_broadcast_sink *default_sink;
 #endif /* CONFIG_BT_AUDIO_BROADCAST_SINK */
 static struct bt_audio_stream *default_stream;
-static uint32_t seq_num;
+static uint16_t seq_num;
 static bool connecting;
 
 struct named_lc3_preset {
@@ -145,7 +145,7 @@ static struct named_lc3_preset lc3_broadcast_presets[] = {
 static struct named_lc3_preset *default_preset = &lc3_unicast_presets[3];
 static bool initialized;
 
-static uint32_t get_next_seq_num(uint32_t interval_us)
+static uint16_t get_next_seq_num(uint32_t interval_us)
 {
 	static int64_t last_ticks;
 	int64_t uptime_ticks, delta_ticks;
@@ -164,7 +164,7 @@ static uint32_t get_next_seq_num(uint32_t interval_us)
 	seq_num_incr = delta_us / interval_us;
 	next_seq_num = (seq_num_incr + seq_num);
 
-	return (uint32_t)next_seq_num;
+	return (uint16_t)next_seq_num;
 }
 
 #if defined(CONFIG_LIBLC3)
diff --git a/tests/bluetooth/bsim_bt/bsim_test_iso/src/main.c b/tests/bluetooth/bsim_bt/bsim_test_iso/src/main.c
index 281e2767d1c..dacd293da06 100644
--- a/tests/bluetooth/bsim_bt/bsim_test_iso/src/main.c
+++ b/tests/bluetooth/bsim_bt/bsim_test_iso/src/main.c
@@ -86,7 +86,7 @@ static struct bt_iso_chan bis_iso_chan = {
 
 #define BIS_ISO_CHAN_COUNT 1
 static struct bt_iso_chan *bis_channels[BIS_ISO_CHAN_COUNT] = { &bis_iso_chan };
-static uint32_t seq_num;
+static uint16_t seq_num;
 
 NET_BUF_POOL_FIXED_DEFINE(bis_tx_pool, BIS_ISO_CHAN_COUNT,
 			  BT_ISO_SDU_BUF_SIZE(CONFIG_BT_ISO_TX_MTU), 8, NULL);