The US State Department has added the Continuity IRA to its list of foreign terrorist organisations.
US Secretary of State, Colin Powell, made the decision
It will be illegal for anyone in the US or under US jurisdiction to provide material support to the dissident Irish republican group.
The designation, announced on Tuesday, also means American financial institutions must freeze the group's assets, and allows the State Department to deny visas to its members.
The dissident republican groups are opposed to the Good Friday Agreement and the current political process and continue to launch attacks on the security forces in Northern Ireland.
The Continuity IRA has been responsible for bomb attacks across Northern Ireland.
Department spokesman Richard Boucher said in a statement: "As part of ongoing US efforts against terrorism, the Secretary of State has designated the terrorist group Continuity Irish Republican Army, along with its aliases Continuity Army Council and Republican Sinn Fein, as a foreign terrorist organisation under the Immigration and Nationality Act."
He added: "As President Bush has made clear, the United States sees no place for paramilitaries nor their violent activities in a democratic society like Northern Ireland."
The decision was taken by US Secretary of State Colin Powell in consultation with the Attorney General and the Secretary of the Treasury.
DUP MP Jeffrey Donaldson said the move would restrict their operational capacity and ability to grow.
"Their supporters will be prevented from fund raising and helping this illegal terrorist organisation through providing arms," he said.
"Obviously if the Continuity IRA is to expand its base, it will need funds and to find supplies of arms.
"At least this closes off one potentially lucrative avenue of support."
There are two main dissident republican factions, the Continuity IRA and the Real IRA.
The Real IRA is already on the US list of foreign terrorist organisations.