Former acting Attorney General Sally Yates has spoken publicly for the first time about concerns she brought to the Trump White House on Russia.
She told Congress she warned that National Security Adviser Michael Flynn "essentially could be blackmailed" because he apparently had lied to his bosses about his contacts with the Russian ambassador.
The statements from Ms Yates, an Obama administration holdover, offered by far the most detailed account of the chain of events that led to Mr Flynn leaving the government in the first weeks of the Trump administration.
Ms Yates, appearing before a Senate panel investigating Russian interference in the 2016 presidential election, described discussions with Trump White House Counsel Don McGahn in late January in which she warned that Mr Flynn apparently had misled the administration about his communications with Sergey Kislyak, the Russian ambassador.
White House officials had insisted that Mr Flynn had not discussed US-imposed sanctions with Mr Kislyak during the presidential transition period, but asked Mr Flynn to resign after news reports indicated he had misled them about the nature of the calls.
"We felt like it was critical that we get this information to the White House, in part because the vice president was making false statements to the public and because we believed that Gen Flynn was possibly compromised," Ms Yates said.
"We knew that was not a good situation, which is why we wanted to let the White House know about it."
The January 26 conversation took place two days after the FBI interviewed Mr Flynn about those contacts. Mr McGahn asked Ms Yates how Mr Flynn did in the interview, but Ms Yates said she could not answer.
She was fired four days later by the Trump administration. James Clapper, director of national intelligence under President Barack Obama, testified as well.
He retired when Mr Trump took office.
The hearing came hours after former Obama administration officials revealed that President Obama had warned Mr Trump against hiring Mr Flynn as national security adviser during an Oval Office meeting after the 2016 election.
The highly anticipated hearing - it was Ms Yates's first appearance on Capitol Hill since her firing - before a Senate panel investigating Russian interference in the presidential election was expected to fill in basic details in the chain of events that led to Mr Flynn's ouster.
Word that President Obama directly warned Mr Trump suggests that concern over Mr Flynn's possible appointment spread to the highest level of government months before his departure.
The Obama-Trump discussion was first reported on Monday by NBC-TV.
Mr Flynn's forced February resignation followed media reports that he had discussed US-imposed sanctions on Russia with Ambassador Kislyak, which was contrary to the public representations of the Trump White House.
Earlier on Monday, former officials said Mr Obama had raised general concerns about Mr Flynn with Mr Trump and told the incoming president there were better people for the national security post.
President Trump's White House press secretary Sean Spicer said in response that if Mr Obama "was seriously concerned" about Mr Flynn's connections to Russia or other foreign countries, he should have withheld Mr Flynn's security clearance.
Mr Flynn served under President Obama as defence intelligence chief before Mr Obama dismissed him from that post.
President Trump moved to distance himself from his former adviser's troubles, tweeting that it was the Obama administration that gave Mr Flynn "the highest security clearance" when he worked at the Pentagon.
President Trump made no mention of the fact that Mr Flynn had been fired by the Obama administration in 2014.
In a second tweet, President Trump said Ms Yates should be asked under oath "if she knows how classified information got into the newspapers" soon after she raised concerns about Mr Flynn with Mr McGahn.
She said on Monday she did not - and that she had revealed no classified information herself.
President Trump has said he has no ties to Russia and is not aware of any involvement by his aides in Moscow's interference in the election.
He has dismissed FBI and congressional investigations into his campaign's possible ties to the election meddling as a "hoax" driven by Democrats bitter over losing the White House.