Microsoft Point-to-Point Encryption

Microsoft Point-to-Point Encryption encrypts data in Point-to-Point Protocol (PPP)-based dial-up connections or Point-to-Point Tunneling Protocol virtual private network connections. 128-bit key, 56-bit key, and 40-bit key MPPE encryption schemes are supported. MPPE provides data security for the PPTP connection that is between the Virtual [private network|VPN] client and the VPN server.
MPPE alone does not compress or expand data, but the protocol is often used in conjunction with Microsoft Point-to-Point Compression which compresses data across PPP or VPN links.
Negotiation of MPPE happens within the Compression Control Protocol, a subprotocol of PPP. This can lead to incorrect belief that it is a compression protocol.
RFC 3078, which defines this protocol, defines RC4 with either 40-bit or 128-bit key lengths as the only encryption options with this protocol.