In a notice to mariners released on Saturday, China said it would be conducting military exercises till Wednesday in a large area of the South China Sea, north of the Spratly Islands. The missile test was part of those exercises, the US media reported.
Taiwan, the Philippines, Brunei, Malaysia and Vietnam all make claims to parts of the sea. China, however, claims a huge area known as the "nine-dash line" and has been building military installations on artificial islands there.
Ahead of the exercise, Beijing warned other ships not to enter a designated area between the Spratly and Paracel Islands for five days, according to the BBC.
Washington "was aware of the Chinese missile launch from the man-made structures in the South China Sea near the Spratly Islands," said Pentagon spokesman Lt. Col. Dave Eastburn on Tuesday.
"What's truly disturbing about this act is that it's in direct contradiction to President Xi's statement ... that he would not militarize those man-made outposts.
"I'm not going to speak on behalf of all the sovereign nations in the region, but I'm sure they agree that (China's) behaviour is contrary to its claim to want to bring peace to the region and obviously actions like this are coercive acts meant to intimidate other (South China Sea) claimants," Eastburn added.
The sea, home to vital shipping lanes, has in recent years become a flashpoint for tensions between China and other regional nations which have overlapping claims over islands and reefs.
China accuses the US Navy of provocation and interference in regional matters.
The US has long been critical of what it says is China's "militarization of the region" and routinely angers Beijing with "freedom of navigation" missions.
( With inputs from IANS )