President Barack Obama has imposed sanctions on Russian officials and intelligence services in retaliation for Russia's alleged interference in the US presidential election by hacking American political sites and email accounts.
The state department has also kicked out 35 Russian diplomats from its embassy in Washington and consulate in San Francisco, giving them and their families 72 hours to leave the US.
The diplomats were declared persona non grata for acting in a "manner inconsistent with their diplomatic status".
Mr Obama said Russians will no longer have access to two Russian government-owned compounds in the United States, in Maryland and in New York.
Russian officials have denied the Obama administration's accusation that the Russian government was trying to influence the US presidential election.
US intelligence agencies concluded that Russia's goal was to help Donald Trump win - an assessment Mr Trump has dismissed as ridiculous.
BREAKING: @BarackObama sanctions Russia
1. 35 diplomats & families xpelled
2.Two compounds closed
3.Russians & agencies sanctioned pic.twitter.com/h7aBj75zjr— JJ Green (@JJGreenWTOP) December 29, 2016
It was the strongest action the Obama administration has taken to date to retaliate for a cyber attack.
"All Americans should be alarmed by Russia's actions," Mr Obama said in a statement released while he was on holiday in Hawaii.
He added: "Such activities have consequences."
Mr Obama ordered sanctions against two Russian intelligence services, the GRU and the FSB, plus companies which the US says support the GRU.
The cyber security firm hired by the Democratic National Committee to investigate the theft of its emails determined earlier this year the hacking came from the Fancy Bear group, believed to be affiliated with the GRU, Russia's military intelligence agency.
The president also sanctioned Lt Gen Korobov, the head of the GRU, and three of his deputies.
Other individuals sanctioned include Alexei Belan and Yevgeny Bogachev, two Russian nationals who have been wanted by the FBI for cyber crimes for years.
Mr Obama said the hacking "could only have been directed by the highest levels of the Russian government", a contention the US has used to suggest Russian president Vladimir Putin was personally involved.
A spokesman for Russian President Vladimir Putin said the new sanctions were a sign of Mr Obama's "unpredictable and, if I may say, aggressive foreign policy" and were aimed at undermining President-elect Donald Trump.
"We think that such steps by a US administration that has three weeks left to work are aimed at two things: to further harm Russian-American ties, which are at a low point as it is, as well as, obviously, to deal a blow to the foreign policy plans of the incoming administration of the president-elect," Dmitry Peskov told reporters in Moscow.