diff --git a/services/Android.bp b/services/Android.bp
index cc0fd98c70604..e11b0442377eb 100644
--- a/services/Android.bp
+++ b/services/Android.bp
@@ -23,6 +23,36 @@ java_defaults {
     },
 }
 
+// Opt-in config for optimizing and shrinking the services target using R8.
+// Enabled via `export SYSTEM_OPTIMIZE_JAVA=true`, or explicitly in Make via the
+// `SOONG_CONFIG_ANDROID_SYSTEM_OPTIMIZE_JAVA` variable.
+// TODO(b/196084106): Enable optimizations by default after stabilizing and
+// building out retrace infrastructure.
+soong_config_module_type {
+    name: "system_optimized_java_defaults",
+    module_type: "java_defaults",
+    config_namespace: "ANDROID",
+    bool_variables: ["SYSTEM_OPTIMIZE_JAVA"],
+    properties: ["optimize"],
+}
+
+system_optimized_java_defaults {
+    name: "services_java_defaults",
+    soong_config_variables: {
+        SYSTEM_OPTIMIZE_JAVA: {
+            optimize: {
+                enabled: true,
+                optimize: true,
+                shrink: true,
+                proguard_flags_files: ["proguard.flags"],
+            },
+            // Note: Optimizations are disabled by default if unspecified in
+            // the java_library rule.
+            conditions_default: {},
+        },
+    },
+}
+
 filegroup {
     name: "services-main-sources",
     srcs: [
@@ -81,6 +111,7 @@ java_library {
 // ============================================================
 java_library {
     name: "services",
+    defaults: ["services_java_defaults"],
     installable: true,
 
     dex_preopt: {
diff --git a/services/proguard.flags b/services/proguard.flags
new file mode 100644
index 0000000000000..30dd6cf545b97
--- /dev/null
+++ b/services/proguard.flags
@@ -0,0 +1,11 @@
+# TODO(b/196084106): Refine and optimize this configuration. Note that this
+# configuration is only used when `SOONG_CONFIG_ANDROID_SYSTEM_OPTIMIZE_JAVA=true`.
+-keep,allowoptimization,allowaccessmodification class ** {
+  *;
+}
+
+# Various classes subclassed in ethernet-service (avoid marking final).
+-keep public class android.net.** { *; }
+
+# Referenced via CarServiceHelperService in car-frameworks-service (avoid removing).
+-keep public class com.android.server.utils.Slogf { *; }
\ No newline at end of file