The state department's annual report on religious freedom around the world criticised Beijing's actions in remote Xinjiang province and Tibetan areas.
Iran, Burma, Egypt and North Korea were all singled out for criticism, along with nations regarded as more tolerant such as Jordan and Algeria.
The report noted some improvements in Saudi Arabia and Vietnam.
Presenting the document, Secretary of State Condoleezza Rice said religious freedom was "at the core of our nation".
"The United States rejects actions that are offensive to particular religious traditions, but we do not condone the prohibition of free speech. That only weakens societies," she said.
She was particularly critical of attempts to outlaw criticism of religions under a principle known as "defamation of religions", which has been championed in the UN by Islamic countries.
"Instead of protecting religious practice and promoting tolerance, this concept seeks to limit freedom of speech and that could undermine the standards of international religious freedom," she said.
The lengthy report has individual sections dealing with each country separately and covers the period from July 2007 to July 2008.
In China, the report highlighted the treatment of the Uighur people - a Muslim group living mainly in Xinjiang.
"The government reportedly continued to detain Uighur Muslim citizens for possession of unauthorised religious texts, imprison them for religious activities determined to be 'extremist', and prevent them from observing certain sacred religious traditions," the report said.
It was also critical of the Beijing government's handling of protests by Tibetans in March - particularly of the use of "patriotic education campaigns" in a bid to stifle dissent.
The report is used to compile a blacklist of "countries of particular concern", which the state department announces towards the end of each year.
China, Saudi Arabia, Iran, Eritrea and Burma are among those who appeared on the blacklist for 2007.