Bluetooth is a specification for short‐range wireless communication using the 2.4 GHz ISM band. It emphasizes low complexity, low power, and low cost. This paper describes an area‐efficient digital baseband module for wireless technology. For area‐efficiency, we carefully consider hardware and software partitioning. We implement complex control tasks of the Bluetooth baseband layer protocols in software running on an embedded microcontroller. Hardware‐efficient functions, such as low‐level bitstream link control; host controller interfaces (HCIs), such as universal asynchronous receiver transmitter (UART) and universal serial bus (USB) interfaces; and audio Codec are performed by dedicated hardware blocks. Furthermore, we eliminate FIFOs for data buffering between hardware functional units. The design is done using fully synthesizable Verilog HDL to enhance the portability between process technologies so that our module can be easily integrated as an intellectual property core on system‐on‐a‐chip (SoC) ASICs. A field programmable gate array (FPGA) prototype of this module was tested for functional verification and realtime operation of file and bitstream transfers between PCs. The module was fabricated in a 0.25‐µm CMOS technology, the core size of which was only 2.79 mm×2.80 mm.