The US embassy said corruption was rife in the adoption scheme
The Vietnamese government has said it will end an adoption agreement with the US, amid accusations of corruption.
Vietnam said it would stop accepting adoption applications after 1 July, cutting short a programme that had been up for renewal on 1 September.
A recent report from the US embassy in Hanoi cited cases in which children had allegedly been sold and families pressured to give up their babies.
Vietnam has dismissed the claims, which it described as unfair.
"The US report includes a lot of distorted information, it is untrue," said Vu Duc Long, director of Vietnam's International Adoption Agency.
The report said the embassy had received "credible" accounts that some adoption agencies gave $10,000 (£5,037) for each child that was referred.
It also detailed brokers travelling to villages to look for babies.
The report was drawn up after US officials noticed a rapid increase in the number of "abandoned" babies offered for adoption.
Vietnam suspended adoption programmes with foreign countries in 2003 in an effort to tackle corruption, before resuming adoption to the US under a bilateral scheme.
Americans have adopted more than 1,200 Vietnamese children over the 18 months ending on 31 March, the Associated Press news agency reported.
The programme attracted media attention when Hollywood actress Angelina Jolie adopted a child from Vietnam last year.
Though China is still the most popular country for US families adopting from abroad, AP reported that adoptions from Vietnam - which had fewer restrictions - had been rising.
The end of the agreement between the US and Vietnam will lead to the closure of 42 US adoption agencies, according to Ms Long.