When you're ready to turn on encryption:

1From a Home or All Apps screen, touch the Settings icon .

2Touch Personal > Security > Encryption > Encrypt phone.

3Read the information about encryption carefully.

The Encrypt phone button is dimmed if your battery's not charged or your phone's not plugged in. If you change your mind about encrypting your phone, touch the Back button.

Warning! If you interrupt the encryption process, you will lose data.

4Touch Encrypt phone.

5Enter your lock screen PIN or password and touch Continue.

6Touch Encrypt phone again.

The encryption process starts and displays its progress. Encryption can take an hour or more, during which time your phone may restart several times.

When encryption is complete, you're prompted to enter your PIN or password.

Subsequently, you must enter your PIN or password each time you power on your phone, to decrypt it.

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Verizon Galaxy Nexus manual