"Haniyeh has close links with Hamas' military wing and has been a proponent of armed struggle, including against civilians," the State Department said in a statement.
Haniyeh is now on the U.S. Treasury sanctions blacklist, which freezes any U.S.-based assets he may have and bans any U.S. person or company from doing business with him.
Haniyeh was elected as the new leader of Hamas in March 2017.
Hamas says its battle is against Israel, not the West, and it has tried to rebrand itself by tweaking its charter. But the U.S., along with Israel and others, shun it as a terror group.
Hamas recently revealed the new roadmap for peace in the conflict between Palestine and Israel as he announced the group's revised foundation document in a press conference in the Qatari capital Doha.