Let F be a field of characteristic p and G a group containing at least one element of order p. It is proved that the group of units of the group algebra FG is a bounded Engel group if and only if FG is a bounded Engel algebra, and that this is the case if and only if G is nilpotent and has a normal subgroup H such that both the factor group G/H and the commutator subgroup H′ are finite p–groups.