In the embedded system domain, both memory requirement and energy consumption are great concerns. To save memory and energy, the 32 bit ARM processor supports the 16 bit Thumb instruction set. For a given program, the Thumb code is typically smaller than the ARM code. However, the limitations of the Thumb instruction set can often lead to generation of poorer quality code. To generate codes with smaller size but a little slower execution speed, Krishnaswarmy suggests a profiling guided selection algorithm at module level for generating mixed ARM and Thumb codes for application programs. The resulting codes of the algorithm gives significant code size reductions with a little loss in performance. When the instruction set is selected at module level, some functions, which should be compiled in Thumb mode to reduce code size, are compiled to ARM code. It means we have additional code size reduction chance. In this paper, we propose a profile guided selection algorithm at function level for generating mixed ARM and Thumb code for application programs so that the resulting codes give additional code size reductions without loss in performance comparing to the module level algorithm. We can reduce 2.7% code size additionally with no performance penalty