Jeff Sessions demanded so-called "sanctuary cities" -- from Boston to Chicago to Los Angeles -- do more to turn illegal immigrants over to the federal authorities for deportation.
"The Department of Justice has a duty to enforce our nation's laws, including our immigration laws," he said from the White House.
"Unfortunately, some states and cities have adopted policies designed to frustrate this enforcement of immigration laws."
The Justice Department would work to claw back grants worth around $4.1 billion a year, he warned.
The 70-year-old former senator zeroed in on the issue of illegal immigrants who have been convicted or detained on suspicion of serious crimes.
He cited examples of those involved in "drug trafficking, hit and run, rape, sex offenses against a child and even murder."
Trump's backers in the right-wing media often feature stories about Hispanic immigrants who have committed violent crimes while in the country illegally.
"Assaults, burglaries, drug crimes, gang rapes, crimes against children and murderers," Sessions said. "Countless Americans would be alive today and countless loved ones would not be grieving today if these policies of sanctuary cities were ended."
"These policies endanger lives of every American," he added.
The Trump administration is trying to force local police to keep immigrants detained until the immigration authorities -- with their more limited resources -- can show up.
However, the administration's critics accuses it of creating a climate of fear, and falsely associating immigrants with criminality.
They point to multiple studies that show immigrants commit crime at lower rates than native-born citizens.
'Police state'
The Lawyers' Committee for Civil Rights accused Sessions of trying to "create a police state" where local law enforcement "are acting at the behest of the federal government to round up immigrants in communities across the country."
Some local law enforcement officials in cities with large migrant populations warn that such a policy would poison community relations.
In January, police chiefs from major cities stressed they wanted to tackle crime, whoever carries it out.
"Cities that aim to build trusting and supportive relations with immigrant communities should not be punished because this is essential to reducing crime and helping victims," the group said in a joint statement with mayors.
Los Angeles Mayor Eric Garcetti gave an equally strident response, accusing Sessions of trying to push local authorities into unconstitutional actions.
"LA's values are not for sale," he said. "There are constitutional protections against the kind of punitive, counterproductive actions proposed today by the attorney general."
"Slashing funds for first responders, for our port and airport, for counterterrorism, crime fighting and community building serves no one -- not this city, not the federal government, not the American people."
San Francisco insisted that "sanctuary cities are safer cities."
"When immigrants can enrol their children in school, access health care for vaccinations, and report crimes, our city and county is safer," said Deirdre Hussey, spokeswoman for San Francisco Mayor Ed Lee.
"It is shocking that the US attorney general, the nation's top law enforcement official, does not agree with this basic principle of public safety."
The debate is unlikely to be resolved soon, with many legal issues expected to be taken up in the courts.
Legal experts question whether immigration offenses should be treated as criminal acts or whether so-called detainer orders from the federal authorities provide legal grounds for local detention.
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