We report on the preparation of Li+ conducting lithium phosphorus oxynitride (LiPON) layers by ion beam sputtering, resulting in ultra-thin layers with a thickness down to only 12 nm. The morphology of the layers is studied by transmission electron microscopy, whereas homogeneity and excellent interface quality is observed. The ion conducting properties of the layers are studied as a function of temperature and layer thickness, using electrochemical impedance spectroscopy. In these measurements, a specific ionic conductivity at room temperature of around 2 · 10−7 S cm−1 is found that results in a maximum conductance of 0.2 S cm−2, thanks to their ultra-small thickness. To demonstrate the applicability of the thin films as functional solid state electrolyte, Ag/LiPON/Pt triple layers are studied, serving as models for all solid state batteries. The functionality of these model batteries is measured by cyclic voltammetry of up to 100 charge–discharge cycles, and their morphology after cycling is investigated by transmission electron microscopy. For the first time, these investigations give insight into the morphology of this kind of model cell after intensive cycling. In particular, they allow determining the specific lithium storage capacity of the interface reaction layer between Ag and LiPON, which is found to be around 12 μAh cm−2 μm−1.