The Antietam, a guided-missile cruiser, and the Higgins, a destroyer, came within 12 nautical miles of the Paracel Islands, an archipelago in waters contested by China's neighbors, according to the New York Times.
The two ships passed within 12 miles of four islands - Tree, Lincoln, Triton and Woody - according to a U.S. defence official.
The move prompted immediate criticism from the United States, which last week pulled its invitation to China to join maritime exercises in the Pacific because of Beijing's "continued militarisation" of the South China Sea.
The operation was the latest attempt to counter what Washington sees as Beijing's efforts to limit freedom of navigation in the strategic waters.
The U.S. military does not comment on the specifics of what it calls "freedom of navigation" exercises meant to assert the Navy's right to sail and operate in any zone deemed legal under global law.
China said "mutual trust between the two militaries" had been "harmed" as a result, and that it would "continue to take all necessary measures to defend the country's sovereignty and security". The island has hosted multi-role fighters, surface-to-air missiles, and anti-ship cruise missiles.
The move has been conducted several times in the past three years in defiance of China's claims it owns the disputed territory.
Beijing has been building artificial islands to reinforce its claim over most of the resource-rich South China Sea despite protests from Southeast Asian countries.
"China's continued militarization of disputed features in the South China Sea only serve to raise tensions and destabilize the region", a Pentagon spokesman, Marine Lt. Col. Christopher Logan, said.
"The United States naval vessels Antietam and Higgins entered without Chinese government permission into territorial waters" around the islands, which China calls the Xisha Islands, Mr Wu said in the statement.
Experts believe China - North Korea's largest trading partner - was behind the recent derailment of the June 12 summit between President Donald Trump and the North's leader, Kim Jong Un.
USA freedom of navigation operations are created to protest maritime claims that are excessive under global law.