I'm using Objectify to store entities into the datastore for my App Engine Project. I need the data to be encrypted... Is this something that happens automatically, or will I need to implement the encryption/decryption at the points in my code where I read/write the entity?
I've looked through the GAE documentation, but the only reference I could find to encryption was for Cloud Storage (buckets.) I couldn't find any mention of encryption with Cloud Datastore.
You can see information about Google Cloud Platform's security features on the security page. That page has a section on Data Encryption. You should also check out the compliance page since it does meet a lot of different compliance standards.
As mentioned in some of the comments, you should always handle your own encryption to protect sensitive data (i.e. credit card numbers), since it can still be accessed through legitimate channels. Otherwise someone who has access to your application (like an owner with code upload privileges -- or someone who has gotten access to an owner's computer) could still get that data.
Update: We now also have a white paper talking about Encryption at Rest on the Google Cloud Platform