South China Sea has become one of the major bone of contentions between the two countries in their relationship as China lays full claim on its waters.
China's military has confronted US missile cruiser and drove it away after it had "illegally intruded" into waters near the South China Sea's Spratly Islands.
"The actions of the US military seriously violated China's sovereignty and security," said Tian Junli, spokesperson for the Southern Theatre Command of the People's Liberation Army on Tuesday.
In a statement, the US Navy said the Chinese statement was "false", calling it "the latest in a long string of PRC actions to misrepresent lawful US maritime operations".
"USS Chancellorsville (CG 62) conducted this FONOP in accordance with international law and then continued on to conduct normal operations in waters where high seas freedoms apply," the statement said, referring to a "freedom of navigation operation" by its military acronym.
"The United States is defending every nation's right to fly, sail, and operate wherever international law allows."
Tian alleged that the United States is a security risk maker in South China Sea and this act of intrusion is an evident to it.
"It's another iron-clad proof of its hegemony in the navigation and militarisation of the South China Sea," Tian added.
China's military said its troops would remain on high alert, the Southern Theatre Command said on its WeChat social media account.
South China Sea has become one of the major bone of contentions between the two countries in their testy relationship as China lays full claim on its waters.
The United States rejects what it calls China's unlawful territorial claims in the resource-rich waters.
In recent past US warships have sailed through the South China Sea with increasing frequency in recent years, in a show of force against the Chinese claims.
READ MORE: The South China Sea dispute explained