"China holds indisputable sovereignty over Nansha Islands and surrounding waters", the Chinese Defense Ministry said early Friday.
Chinese navy guided missile frigates "took immediate action to identify and verify the U.S. ship, and warned and dispelled it", the Defense Ministry said.
In a statement late Thursday, Chinese Foreign Ministry spokesman Geng Shuang called the U.S. Navy's action a "provocation" that "severely undermines China's sovereignty and security, and severely endangers the safety of frontline personnel of both sides".
Two other US Navy ships approached China-claimed islands in the South China Sea in July and May.
However, the Washington-based Center for Strategic and International Studies said China was continuing to reclaim land in the Paracel Islands to the north of the Spratlys.
"That is true in the South China Sea as in other places around the globe".
Tensions in the region escalated after China began to turn seven reefs in the Spratly group, including Mischief, which is also claimed by US defence treaty ally the Philippines, into islands, including three with runways.More news: Olympics: LA approves host city contract for 2028 Games
Chinese defence ministry spokesman Wu Qian said the situation in the South China Sea has "stabilised" because of "joint efforts" of China and neighbouring countries, but the USA operation threatened "peace and stability in the region". It added that United States moves "to pick quarrels and make troubles under the banner of "freedom of navigation" endangered lives and harmed regional stability.
The operation came as President Donald Trump's administration seeks Chinese cooperation in dealing with North Korea's missile and nuclear programmes, and could complicate efforts to secure a common stance.
Territorial waters are defined by the UN Convention on the Law of the Sea as extending no more than 12 nautical miles from a state's coastline.
The US military has a long-standing position that its operations are carried out throughout the world, including in areas claimed by allies, and they are separate from political considerations.
A scheduled meeting between Chinese and Vietnamese foreign ministers on the sidelines of the summit was canceled.
The archipelago is claimed in its entirety by China, Taiwan and Vietnam, while portions are claimed by Malaysia and the Philippines.
The string of islets in Spratly archipelago is where China is reported to be building new facilities, paving the way for Beijing to deploy an array of military assets in the region. Since 1985 Brunei has claimed a continental shelf that overlaps a southern reef but has not made any formal claim to the reef.