diff --git a/build/cmake/ProjectVariables.cmake b/build/cmake/ProjectVariables.cmake
index 5b393839..b12f5ef1 100644
--- a/build/cmake/ProjectVariables.cmake
+++ b/build/cmake/ProjectVariables.cmake
@@ -66,6 +66,20 @@ IF (NOT DEFINED ENV{PDO_SOURCE_ROOT})
 ENDIF()
 SET(PDO_SOURCE_ROOT $ENV{PDO_SOURCE_ROOT})
 
+# The memory size option configures enclave and interpreter memory
+# size values. The variable may have the value of "SMALL", "MEDIUM" or
+# "LARGE". This is a project variable because the configurations
+# depend on one another (the interpreter heap size must fit into the
+# enclave heap, for example).
+SET(PDO_MEMORY_CONFIG "MEDIUM" CACHE STRING "Set memory size parameters for enclave and interpreter")
+IF (DEFINED ENV{PDO_MEMORY_CONFIG})
+  SET(PDO_MEMORY_CONFIG $ENV{PDO_MEMORY_CONFIG})
+ENDIF()
+SET(MEMORY_SIZE_OPTIONS "SMALL" "MEDIUM" "LARGE")
+IF (NOT ${PDO_MEMORY_CONFIG} IN_LIST MEMORY_SIZE_OPTIONS)
+  MESSAGE(FATAL_ERROR "Invalid memory size; ${PDO_MEMORY_CONFIG}")
+ENDIF()
+
 # Get the current version using the get_version
 # utility; note that this will provide 0.0.0 as
 # the version if something goes wrong (like running
diff --git a/build/cmake/SGX.cmake b/build/cmake/SGX.cmake
index 74bc3967..73447aae 100644
--- a/build/cmake/SGX.cmake
+++ b/build/cmake/SGX.cmake
@@ -21,16 +21,41 @@ IF (NOT DEFINED ENV{PDO_SGX_KEY_ROOT})
 ENDIF()
 SET(PDO_SGX_KEY_ROOT "$ENV{PDO_SGX_KEY_ROOT}")
 
-IF (NOT DEFINED ENV{SGX_MODE})
-  MESSAGE(FATAL_ERROR "SGX_MODE not defined")
+# Memory size should be set in ProjectVariables.cmake which must be included
+# before this file. There are three values for memory size: SMALL, MEDIUM
+# and LARGE. Each provides defaults for memory allocation. See the note
+# about memory size in ProjectVariables.cmake regarding dependencies between
+# memory settings here and in other parts of PDO.
+IF (NOT DEFINED PDO_MEMORY_CONFIG)
+  MESSAGE(FATAL_ERROR "PDO_MEMORY_CONFIG not defined")
+ENDIF()
+
+IF (${PDO_MEMORY_CONFIG} STREQUAL "SMALL")
+  MATH(EXPR ENCLAVE_STACK_SIZE "2 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_HEAP_SIZE "32 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_RESERVED_SIZE "1 * 1024 * 1024")
+ELSEIF (${PDO_MEMORY_CONFIG} STREQUAL "MEDIUM")
+  MATH(EXPR ENCLAVE_STACK_SIZE "2 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_HEAP_SIZE "64 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_RESERVED_SIZE "2 * 1024 * 1024")
+ELSEIF (${PDO_MEMORY_CONFIG} STREQUAL "LARGE")
+  MATH(EXPR ENCLAVE_STACK_SIZE "2 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_HEAP_SIZE "128 * 1024 * 1024")
+  MATH(EXPR ENCLAVE_RESERVED_SIZE "4 * 1024 * 1024")
+ELSE()
+  MESSAGE(FATAL_ERROR "Invalid memory size; ${PDO_MEMORY_CONFIG}")
 ENDIF()
-SET(SGX_MODE $ENV{SGX_MODE})
 
 # There are effectively three build modes for SGX:
 #   1) SIM mode with PDO_DEBUG_BUILD enabled
 #   2) HW mode with PDO_DEBUG_BUILD enabled
 #   3) HW mode with PDO_DEBUG_BUILD disabled (release mode)
 # For now we just check the consistency of the variables (SGX_MODE, PDO_DEBUG_BUILD and CMAKE_BUIDL_TYPE)
+IF (NOT DEFINED ENV{SGX_MODE})
+  MESSAGE(FATAL_ERROR "SGX_MODE not defined")
+ENDIF()
+SET(SGX_MODE $ENV{SGX_MODE})
+
 IF (${SGX_MODE} STREQUAL "SIM")
     IF (NOT ${PDO_DEBUG_BUILD})
         MESSAGE(FATAL_ERROR "SGX_MODE=SIM does not accept PDO_DEBUG_BUILD=0")
@@ -47,6 +72,7 @@ ELSE()
     SET(SGX_USE_SIMULATOR FALSE)
 ENDIF()
 
+# These environment variables are generally set through the SGX SDK
 IF (NOT DEFINED ENV{SGX_SDK})
   MESSAGE(FATAL_ERROR "SGX_SDK not defined")
 ENDIF()
diff --git a/build/common-config.sh b/build/common-config.sh
index eeddb520..5c8873cd 100755
--- a/build/common-config.sh
+++ b/build/common-config.sh
@@ -34,19 +34,19 @@ var_set() {
 	"
 	env_key_sort[$i]="WASM_SRC"; i=$i+1; export WASM_SRC=${env_val[WASM_SRC]};
 
-	env_val[WASM_MEM_CONFIG]="${WASM_MEM_CONFIG:-MEDIUM}"
-	env_desc[WASM_MEM_CONFIG]="
-		WASM_MEM_CONFIG indicates the memory configuration for the
-		WASM runtime: the runtime's global memory pool size,
+	env_val[PDO_MEMORY_CONFIG]="${PDO_MEMORY_CONFIG:-MEDIUM}"
+	env_desc[PDO_MEMORY_CONFIG]="
+		PDO_MEMORY_CONFIG indicates the memory configuration for the
+		enclave and WASM runtime: the runtime's global memory pool size,
 		and a module's operand stack and heap size.
 		When the variable is set to 'SMALL', the runtime's memory pool
-		size is set to 1MB. If the variable is set to 'MEDIUM', the
-		runtime's memory pool size is set to 2MB.
+		size is set to 4MB. If the variable is set to 'MEDIUM', the
+		runtime's memory pool size is set to 8MB.
 		When the variable is set to 'LARGE', the runtime's
-		memory pool size is set to 4MB. See
+		memory pool size is set to 16MB. See
 		common/interpreter/wawaka_wasm/README.md for further details.
 	"
-	env_key_sort[$i]="WASM_MEM_CONFIG"; i=$i+1; export WASM_MEM_CONFIG=${env_val[WASM_MEM_CONFIG]};
+	env_key_sort[$i]="PDO_MEMORY_CONFIG"; i=$i+1; export PDO_MEMORY_CONFIG=${env_val[PDO_MEMORY_CONFIG]};
 
 	env_val[PDO_INTERPRETER]="${PDO_INTERPRETER:-wawaka}"
 	env_desc[PDO_INTERPRETER]="
diff --git a/build/tests/wawaka/memory-test.json b/build/tests/wawaka/memory-test.json
index 4c885a6f..86ac26db 100644
--- a/build/tests/wawaka/memory-test.json
+++ b/build/tests/wawaka/memory-test.json
@@ -140,13 +140,12 @@
         "expected": "1500000"
     },
     {
-        "description" : "big value test 2 MB should {invert} with WAMR \"out of memory\" exception",
+        "description" : "big value test 2 MB",
         "MethodName": "big_value_test",
         "KeywordParameters": {
             "num_chars" : 2000000
         },
-        "invert": "fail",
-        "expected": "internal pdo error"
+        "expected": "2000000"
     },
     {
         "description" : "deep recursion test {KeywordParameters}",
@@ -197,13 +196,12 @@
         "expected": "64000"
     },
     {
-        "description" : "big key test 1 MB should {invert} with WAMR \"out of memory\" exception",
+        "description" : "big key test 1 MB",
         "MethodName": "big_key_test",
         "KeywordParameters": {
             "num_chars" : 1000000
         },
-        "invert": "fail",
-        "expected":"internal pdo error"
+        "expected":"1000000"
     },
     {
         "description" : "deep recursion test {KeywordParameters}",
diff --git a/common/interpreter/wawaka_wasm/CMakeLists.txt b/common/interpreter/wawaka_wasm/CMakeLists.txt
index b4fc3e4d..1b847638 100644
--- a/common/interpreter/wawaka_wasm/CMakeLists.txt
+++ b/common/interpreter/wawaka_wasm/CMakeLists.txt
@@ -31,11 +31,6 @@ IF (SUBMOD_CONTENTS EQUAL 0)
   MESSAGE(FATAL_ERROR "WAMR git submodule has not been cloned. Please run `git submodule update --init` first.")
 ENDIF()
 
-IF (NOT DEFINED ENV{WASM_MEM_CONFIG})
-  MESSAGE(FATAL_ERROR "WASM_MEM_CONFIG environment variable not defined!")
-ENDIF()
-SET(WASM_MEM_CONFIG "$ENV{WASM_MEM_CONFIG}")
-
 # Reset default linker flags
 SET (CMAKE_SHARED_LIBRARY_LINK_C_FLAGS "")
 SET (CMAKE_SHARED_LIBRARY_LINK_CXX_FLAGS "")
@@ -164,22 +159,31 @@ SGX_PREPARE_TRUSTED(${WAWAKA_STATIC_NAME})
 # HEAP_SIZE: Size of the runtime's heap for dynamic allocations by a WASM module.
 # STACK_SIZE: Size of the runtime's stack for executing a WASM module
 # Layout: RUNTIME_MEM_POOL_SIZE > HEAP_SIZE + STACK_SIZE + padding
-IF (WASM_MEM_CONFIG STREQUAL "SMALL")
-  MESSAGE(STATUS "Using SMALL memory configuration")
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE RUNTIME_MEM_POOL_SIZE=1*1024*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE HEAP_SIZE=512*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE STACK_SIZE=64*1024)
-ELSEIF (WASM_MEM_CONFIG STREQUAL "LARGE")
-  MESSAGE(STATUS "Using LARGE memory configuration")
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE RUNTIME_MEM_POOL_SIZE=4*1024*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE HEAP_SIZE=3*1024*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE STACK_SIZE=256*1024)
-ELSE ()
-  MESSAGE(STATUS "Using MEDIUM memory configuration")
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE RUNTIME_MEM_POOL_SIZE=2*1024*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE HEAP_SIZE=1536*1024)
-  TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE STACK_SIZE=128*1024)
-ENDIF ()
+# The numbers below were chosen to set RUNTIME_MEM_POOL_SIZE to be about
+# 1/8 of the size of the enclave heap size defined in the SGX.cmake file.
+IF (NOT DEFINED PDO_MEMORY_CONFIG)
+  MESSAGE(FATAL_ERROR "PDO_MEMORY_CONFIG not defined")
+ENDIF()
+
+IF (${PDO_MEMORY_CONFIG} STREQUAL "SMALL")
+  MATH(EXPR WW_RUNTIME_MEM_POOL_SIZE "4 * 1024 * 1024")
+  MATH(EXPR WW_STACK_SIZE "512 * 1024")
+  MATH(EXPR WW_HEAP_SIZE "3 * 1024 * 1024")
+ELSEIF (${PDO_MEMORY_CONFIG} STREQUAL "MEDIUM")
+  MATH(EXPR WW_RUNTIME_MEM_POOL_SIZE "8 * 1024 * 1024")
+  MATH(EXPR WW_STACK_SIZE "512 * 1024")
+  MATH(EXPR WW_HEAP_SIZE "7 * 1024 * 1024")
+ELSEIF (${PDO_MEMORY_CONFIG} STREQUAL "LARGE")
+  MATH(EXPR WW_RUNTIME_MEM_POOL_SIZE "16 * 1024 * 1024")
+  MATH(EXPR WW_STACK_SIZE "512 * 1024")
+  MATH(EXPR WW_HEAP_SIZE "15 * 1024 * 1024")
+ELSE()
+  MESSAGE(FATAL_ERROR "Invalid memory size; ${PDO_MEMORY_CONFIG}")
+ENDIF()
+
+TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE RUNTIME_MEM_POOL_SIZE=${WW_RUNTIME_MEM_POOL_SIZE})
+TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE HEAP_SIZE=${WW_HEAP_SIZE})
+TARGET_COMPILE_DEFINITIONS(${WAWAKA_STATIC_NAME} PRIVATE STACK_SIZE=${WW_STACK_SIZE})
 
 TARGET_INCLUDE_DIRECTORIES(${WAWAKA_STATIC_NAME} PRIVATE ${INTERPRETER_INCLUDE_DIRS})
 TARGET_INCLUDE_DIRECTORIES(${WAWAKA_STATIC_NAME} PRIVATE ${IWASM_DIR}/include)
diff --git a/contracts/wawaka/contract-build.cmake b/contracts/wawaka/contract-build.cmake
index 2f96d13f..843bd48d 100644
--- a/contracts/wawaka/contract-build.cmake
+++ b/contracts/wawaka/contract-build.cmake
@@ -28,40 +28,11 @@ IF (NOT DEFINED ENV{WASM_SRC})
 ENDIF()
 SET(WASM_SRC "$ENV{WASM_SRC}")
 
-IF (NOT DEFINED ENV{WASM_MEM_CONFIG})
-  MESSAGE(FATAL_ERROR "WASM_MEM_CONFIG environment variable not defined!")
-ENDIF()
-SET(WASM_MEM_CONFIG "$ENV{WASM_MEM_CONFIG}")
-
 # this should be set by the WAMR toolchain file
 IF (NOT DEFINED WASI_SDK_DIR)
   MESSAGE(FATAL_ERROR "WASM_SDK_DIR was not defined, check toolchain defines")
 ENDIF()
 
-# ---------------------------------------------
-# Set up the memory configuration
-# ---------------------------------------------
-
-# LINEAR_MEMORY: Maximum size for a WASM module's linear memory (module's
-# internal stack + static globals + padding); needs to be multiple of 64KB
-
-# INTERNAL_STACK_SIZE: Size of a WASM module's internal data stack
-# (part of LINEAR_MEMORY)
-
-IF (WASM_MEM_CONFIG STREQUAL "SMALL")
-  SET(INTERNAL_STACK_SIZE 24576)
-  SET(LINEAR_MEMORY 65536)
-  message(STATUS "Building contracts for SMALL memory configuration")
-ELSEIF (WASM_MEM_CONFIG STREQUAL "LARGE")
-  SET(INTERNAL_STACK_SIZE 98304)
-  SET(LINEAR_MEMORY 262144)
-  message(STATUS "Building contracts for LARGE memory configuration")
-ELSE()
-  SET(INTERNAL_STACK_SIZE 49152)
-  SET(LINEAR_MEMORY 131072)
-  message(STATUS "Building contracts for MEDIUM memory configuration")
-ENDIF ()
-
 # ---------------------------------------------
 # Set up the compiler configuration
 # ---------------------------------------------
@@ -80,11 +51,7 @@ LIST(APPEND WASM_BUILD_OPTIONS "-std=c++11")
 LIST(APPEND WASM_BUILD_OPTIONS "-DUSE_WASI_SDK=1")
 
 SET(WASM_LINK_OPTIONS)
-LIST(APPEND WASM_LINK_OPTIONS "-Wl,--initial-memory=${LINEAR_MEMORY}")
-LIST(APPEND WASM_LINK_OPTIONS "-Wl,--max-memory=${LINEAR_MEMORY}")
-LIST(APPEND WASM_LINK_OPTIONS "-z stack-size=${INTERNAL_STACK_SIZE}")
 LIST(APPEND WASM_LINK_OPTIONS "-Wl,--allow-undefined")
-
 LIST(APPEND WASM_LINK_OPTIONS "-Wl,--export=ww_dispatch")
 LIST(APPEND WASM_LINK_OPTIONS "-Wl,--export=ww_initialize")
 
diff --git a/contracts/wawaka/memory-test/test-small.json b/contracts/wawaka/memory-test/test-small.json
index 460d4fb8..57844008 100644
--- a/contracts/wawaka/memory-test/test-small.json
+++ b/contracts/wawaka/memory-test/test-small.json
@@ -31,15 +31,6 @@
         },
         "expected": "512000"
     },
-    {
-        "description" : "big value test 521 KB should {invert} with WAMR \"out of memory\" exception",
-        "MethodName": "big_value_test",
-        "KeywordParameters": {
-            "num_chars" : 521000
-        },
-        "invert": "fail",
-        "expected": "internal pdo error"
-    },
     {
         "description" : "deep recursion test {KeywordParameters}",
         "MethodName": "deep_recursion_test",
@@ -64,15 +55,6 @@
         },
         "expected": "256000"
     },
-    {
-        "description" : "big key test 300 KB should {invert} with WAMR \"out of memory\" exception",
-        "MethodName": "big_key_test",
-        "KeywordParameters": {
-            "num_chars" : 300000
-        },
-        "invert": "fail",
-        "expected": "internal pdo error"
-    },
     {
         "description" : "deep recursion test {KeywordParameters}",
         "MethodName": "deep_recursion_test",
diff --git a/eservice/lib/libpdo_enclave/pdo_enclave.config.xml.in b/eservice/lib/libpdo_enclave/pdo_enclave.config.xml.in
index 335927b8..2bdac3f1 100644
--- a/eservice/lib/libpdo_enclave/pdo_enclave.config.xml.in
+++ b/eservice/lib/libpdo_enclave/pdo_enclave.config.xml.in
@@ -17,9 +17,10 @@ limitations under the License.
 <EnclaveConfiguration>
   <ProdID>0x90E7</ProdID>
   <ISVSVN>1</ISVSVN>
-  <StackMaxSize>0x80000</StackMaxSize>
-  <HeapMaxSize>0x2000000</HeapMaxSize>
-  <ReservedMemMaxSize>0x100000</ReservedMemMaxSize>
+  <StackMaxSize>${ENCLAVE_STACK_SIZE}</StackMaxSize>
+  <HeapMaxSize>${ENCLAVE_HEAP_SIZE}</HeapMaxSize>
+  <ReservedMemMaxSize>${ENCLAVE_RESERVED_SIZE}</ReservedMemMaxSize>
+  <ReservedMemInitSize>${ENCLAVE_RESERVED_SIZE}</ReservedMemInitSize>
   <ReservedMemExecutable>1</ReservedMemExecutable>
   <TCSNum>2</TCSNum>
   <TCSPolicy>1</TCSPolicy>