President Donald Trump announced Wednesday that transgender people may not serve "in any capacity" in the US military, citing the "tremendous medical costs and disruption" their presence would cause.
In late June, Pentagon chief Jim Mattis delayed for six months a plan put in place under Barack Obama's administration to start accepting transgender recruits.
An estimated 2,500 to 7,000 transgender people are among the 1.3 million active-duty service members.
"After consultation with my generals and military experts, please be advised that the United States government will not accept or allow transgender individuals to serve in any capacity in the US Military," Trump tweeted.
"Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail. Thank you."
The issue of transgender rights in America has been increasingly in the spotlight in recent months, especially over how states regulate the use of public restrooms.
The Trump administration faced protests earlier this year after it reversed Obama-era federal protections that urged schools to allow transgender students to use the bathroom corresponding to their gender identity, not the gender on their birth certificate.
Last month, the Pentagon said the five armed service branches could delay accepting transgender recruits until January 1 as they "review their accession plans and provide input on the impact to the readiness and lethality of our forces," spokeswoman Dana White said in a statement.
Last week, White explained that the different services were not in agreement on when to accept transgender recruits.
"The service chiefs all had to give their what needed-to-be-done timeframes" for integrating transgender troops, she told reporters.
"Different services had different takes. Some asked for time... there were all kinds of different recommendations."
Perhaps the most famous transgender US soldier is former Army intelligence analyst Chelsea Manning, who served seven years in prison for one of the largest dumps of classified documents in US history.
Manning, who served as Bradley Manning, was initially sentenced to 35 years in prison in 2013 for leaking more than 700,000 classified documents to WikiLeaks three years earlier.
She twice tried to take her own life last year alone, before then-president Obama commuted her sentence just days before he left office in January. Manning walked free in May.
During her incarceration at the Fort Leavenworth military prison, Manning battled for -- and won -- the right to begin hormone treatment to begin transitioning toward her female identity.
Manning, who is still employed by the army and retains its insurance coverage, has become an icon for transgender activists.