U.S. officials, speaking on condition of anonymity, said the USS John S McCain travelled to within 12 nautical miles of Mischief Reef in the Spratly Islands, among a string of islets, reefs and shoals.
McCain sailed within 12 nautical miles of Mischief Reef, one of three Chinese man-made islands with a runway and military fortifications.
Beijing also said it was "very displeased" with the warship's actions and urged the United States to respect to Chinese sovereignty and security.
It was not immediately clear if the Chinese demanded the US destroyer leave as they have done in the past.
U.S. Pacific Fleet spokeswoman Lt. Cmdr.
"All operations are conducted in accordance with worldwide law and demonstrate that the United States will fly, sail and operate wherever global law allows".
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Although China opposes inclusion of the sea disputes in worldwide conferences, partly to prevent the U.S. and other Western governments from intervening, U.S. Secretary of State Rex Tillerson, Australian Foreign Minister Julie Bishop and Japan's new top diplomat, Taro Kono, expressed concern over aggressive actions in the waters.
The US move came four days after the United States, Australia and Japan denounced Beijing's island-building and militarisation of the South China Sea on the sidelines of a security forum of the 10-nation Association of Southeast Asian Nations (ASEAN) in Manila.
The Pentagon declined to provide any details but said that all operations are conducted in accordance with worldwide law.
The whole territory of the South China Sea, which is believed to be extremely rich in energy resources, is disputed.
Attracted by the strategic military location and the prospect of oil, China, Taiwan, Brunei, the Philippines, Malaysia and Vietnam have all laid territorial claim to the Spratly's and have occupied several islands.
China, which despite a pledge to the contrary, has continued to militarize the waters as it seeks to reinforce effective control of much of the waterway, through which at least $3 trillion in trade passes each year. "The provocations of the United States would compel China to take measures to increase its defense capabilities buildups".
China's foreign ministry said the operation had "violated global and Chinese law and seriously harmed Beijing's sovereignty and security".