Jim Mattis has told Nato allies that they must start increasing defence spending by the end of the year or the Trump administration will "moderate its commitment" to them.
That is according to a text of the Defence Secretary's remarks to the alliance's 27 other defence ministers - who are meeting in Brussels.
He has not gone into detail about how the US might lessen its commitment if Nato members fall short.
Mr Mattis is echoing a demand made repeatedly by President Donald Trump.
The Pentagon chief says Nato must adopt a plan this year that sets milestone dates for governments to meet a military funding goal of 2% of gross domestic product.