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Rights groups say Beijing is severely persecuting the mostly Muslim Uighurs in detention camps.
China calls these "vocational training centres" to combat extremism.
The Commerce Department announced its decision on Monday.
These 28 entities are implicated in "China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups", the filing reads.
Xinjiang province's Public Security Bureau is on the list, along with 19 other smaller government agencies.
Hikvision, Dahua Technology and Megvii Technology are among eight commercial groups on the list, all of which specialise in facial-recognition technology. Hikvision is one of the largest surveillance equipment manufacturers in the world.
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It is not the first time the US has placed Chinese groups under a trade ban. In May, the Trump administration added telecommunications giant Huawei to the Entity List because of security fears over its products.
Both countries are in the midst of a trade war, and have sent delegations to Washington for a meeting about the tensions later this week.
According to reports in September, the White House is mulling de-listing Chinese companies from US stock exchanges.
China says people in Xinjiang are attending "vocational training centres" designed to combat extremism.
But human rights groups and the UN say China is holding up to one million Uighurs and other Muslims in detention camps.
There have been increasingly vocal denunciations from the US and other countries about China's actions in Xinjiang.
Last week, US Secretary of State Mike Pompeo alleged that China "demands its citizens worship government, not God" in a press conference in the Vatican.
And in July more than 20 countries at the UN Human Rights Council signed a joint letter criticising China's treatment of the Uighurs and other Muslims.