US Secretary of State Condoleezza Rice has voiced concern about Russia's direction by saying too much power is concentrated within the Kremlin.
Ms Rice has received a cool reception in Moscow
Her comments, made during a visit to Moscow, will be seen as a thinly veiled criticism of President Vladimir Putin.
Earlier she met human rights activists and said she wanted to help them build institutions to protect people from the "arbitrary power of the state".
But she also said she had no wish to interfere in Russia's internal affairs.
She and US Defence Secretary Robert Gates are in Moscow for talks on US plans to base a missile shield in Eastern Europe - which Russia opposes.
Washington has so far been cautious about criticising the government of Russian President Vladimir Putin on democracy.
But the BBC's Rupert Wingfield-Hayes in Moscow says this is rapidly becoming another issue to add to the long list of those that divide Russia and America.
Ms Rice met eight prominent human rights activists at the residence of the US ambassador to Moscow on Saturday.
Afterwards she told reporters: "I think that there is too much concentration of power in the Kremlin. Everybody has doubts about the full independence of the judiciary."
She added: "I am quite confident that your goal is to build institutions that are indigenous to Russia... but that are also respectful of what we all know to be universal values."
Those values included "the rights of individuals to liberty..., the right to assembly, the right to not have to deal with the arbitrary power of the state", Ms Rice said.
Tatyana Lokshina, one of the activists who met her, told the BBC that there had been "a very serious setback in Russia as far as human rights are concerned".
Another activist, Lyudmila Alekseyeva, said she had told Ms Rice that an "authoritarian system" had been built by Mr Putin.
The US and other Western powers have accused of him of rolling back democracy.
He has centralised power and brought television - the predominant source of information for most of Russians - under tight control.
Mr Putin denies curbing freedom of speech, pointing to thousands of non-state publications.
The secretary of state was due to have dinner later with her Russian counterpart, Sergei Lavrov, while Mr Gates will meet Prime Minister Viktor Zubkov.
Their trip comes as Russia prepares for parliamentary and presidential elections over the next five months.
Mr Putin must step down next year after two terms in office. But he has already hinted he may become prime minister and return as president in 2012, as the constitution allows.
On Friday, talks about US plans to base a missile shield in Eastern Europe ended acrimoniously.
Russia is angry at US plans to base an anti-missile system in eastern Europe.
But the White House team rejected Russian appeals at Friday's meetings in Moscow to halt the scheme.
Mr Putin was not convinced by US assurances that the system would be to counteract "rogue" states such as North Korea and Iran.
He threatened to abandon a key nuclear missile reduction treaty if Washington forged ahead with the plans.