All US military detainees, including those at Guantanamo Bay, are to be treated in line with the minimum standards of the Geneva Conventions.
Rules at Guantanamo have been unclear in the past
The White House announced the shift in policy almost two weeks after the US Supreme Court ruled that the conventions applied to detainees.
President Bush had long fought the idea that US detainees were prisoners of war entitled to Geneva Convention rights.
The Pentagon outlined the new standards to the military in a 7 July memo.
The directive says all military detainees are entitled to humane treatment and to certain basic legal standards when they come to trial, as required by Common Article 3 of the Geneva Conventions.
The Bush administration has come under intense and sustained international criticism for its treatment of prisoners held at Guantanamo Bay in Cuba.
The military has been using the site to house hundreds of detainees, many believed to have been picked up off battlefields in Afghanistan.
When the detention centre was established in 2002, President Bush ordered that detainees be treated "humanely, and to the extent appropriate and consistent with military necessity, in a manner consistent with the principles of Geneva".
His spokesman Tony Snow said on Tuesday that the Pentagon directive did not represent a change: "It is not really a reversal of policy. Humane treatment has always been the standard."
Court steps in
At the end of June, the Supreme Court ruled 5-3 that the Bush administration did not by itself have the authority to order that the detainees be tried by military commission.
It said its decision was based on both US military law and the Geneva Conventions - asserting for the first time in US law that the detainees were entitled to Geneva protections.
But the Supreme Court left open the possibility that the detainees could be tried by military commission if Congress established an appropriate legal framework for doing so.
The Senate Judiciary Committee began hearings on the issue on Tuesday morning, just as news of the new military policy became public.
Daniel Dell'Orto, a defence department lawyer who was the first to testify, said there were about 1,000 detainees in US military custody around the world.
Guantanamo Bay holds an estimated 450. Mr Dell'Orto did not say where the others were being held.
The new Pentagon policy applies only to detainees being held by the military, and not to those in CIA custody, such as alleged mastermind of the 11 September attacks, Khalid Sheikh Mohammed.
The Geneva Conventions, which were passed in the wake of World War II, are meant to guarantee minimum standards of protection for non-combatants and former combatants in war.