The US government is cutting almost all security aid to Pakistan, saying it has failed to deal with terrorist networks operating on its soil.
The state department said the freeze would remain in place until Islamabad took action against the Haqqani network and the Afghan Taliban.
Earlier this week, President Trump accused Pakistan of lying and deceiving the US while receiving billions in aid.
The Pakistan government has forcefully pushed back against the US, a key ally.
After the earlier comments by Mr Trump it called attacks on it by US officials “incomprehensible” and said they “negated the decades of sacrifices made by the Pakistani nation”.
The US stance has been praised by India and Afghanistan, but China, which is investing tens of billions in Pakistan, has defended Islamabad.
The Trump administration had already delayed handing over $255m (£188m) in military aid to Pakistan.
In announcing the restrictions, state department spokeswoman Heather Nauert said she could not yet put a dollar value on how much aid was being cut.
She said the US government considered that the Afghan Taliban and the Haqqani network were “destabilising the region and also targeting US personnel”.
On Thursday, the state department also placed Pakistan on a special watch list for “severe violations of religious freedom”.