The announcement served as a stunning reversal for the US military, which has been working with the heads of service branches to implement a plan put in place under Barack Obama's administration to start accepting transgender recruits.
"After consultation with my generals and military experts, please be advised that the United States Government will not accept or allow transgender individuals to serve in any capacity in the US Military," Trump tweeted.
"Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail. Thank you."
Pentagon officials appeared blindsided by Trump's tweets, with spokesman Navy Captain Jeff Davis referring questions to the White House.
"We will provide revised guidance to the Department in the near future," Davis said.
Defense Secretary Jim Mattis is currently on vacation. When pressed on the extent to which Trump consulted with him or the Pentagon, Davis said only: "This was something that was the product of consultation."
Last month, Mattis said the five armed service branches could delay accepting transgender recruits until January 1 because the different services were not in agreement on when to accept transgender recruits.
Unanswered questions
Trump's announcement left unanswered a slew of questions, including whether transgender personnel currently serving could soon face getting booted from the military.
Estimates of the number of transgender troops vary widely. A much-cited study by the Rand Corporation in June 2016 found there are between 1,320 and 6,630 among the 1.3 million active duty service members.
But the Human Rights Campaign civil rights organization said there are currently about 15,000 active transgender troops.
The RAND study noted that only a small portion of service members would ever seek gender transition that would affect their deployability or health costs, adding between $2.4 million and $8.4 million to the Pentagon's vast budget.
Republican Congresswoman Vicky Hartzler called the study "very flawed" and said Trump's announcement would improve military readiness.
We need to be "focused on ... those who are able to fight tonight. When you have this (gender reassignment) surgery, you can't be deployed for almost 300 days and somebody else has to go in your place," Hartzler told CNN.
Transgender rights in America have increasingly been in the spotlight in recent months, especially over how states regulate the use of public restrooms.
The Trump administration faced protests earlier this year after it reversed Obama-era federal protections urging schools to allow transgender students to use the bathroom corresponding to their gender identity, not the gender on their birth certificate.
'Every patriotic American'
Trump's announcement drew swift condemnation from critics and rights groups.
"Every patriotic American who is qualified to serve in our military should be able to serve. Full stop," former vice president Joe Biden said on Twitter.
Ash Carter, who was Obama's last defense secretary and oversaw the policy shift allowing transgender troops to sign up and serve openly, said the decision would send "the wrong signal" to potential new recruits.
"What matters in choosing those who serve is that they are best qualified. To choose service members on other grounds than military qualifications is social policy and has no place in our military," Carter said in a statement.
The American Civil Liberties Union called the move "outrageous and desperate," and Republican Senator John McCain blasted Trump for announcing a major policy shift on Twitter.
"Any American who meets current medical and readiness standards should be allowed to continue serving," he said.
'Cowardice'
Perhaps the most famous transgender US soldier is former Army intelligence analyst Chelsea Manning, who served seven years in prison for one of the largest dumps of classified documents in US history.
During her incarceration at the Fort Leavenworth military prison, Manning battled for -- and won -- the right to begin hormone treatment to begin transitioning toward her female identity.
Manning, who is still employed by the Army and retains its insurance coverage, has become an icon for transgender activists.
"So, biggest baddest most $$ military on earth cries about a few trans people but funds the F-35? Sounds like cowardice," Manning tweeted after Trump's announcement, referring to the US military's most expensive, state-of-the-art warplane.
Retired Navy SEAL Kristin Beck, who came out as transgender after spending 20 years with the elite commandos, challenged Trump.
"Let's meet face to face and you tell me I'm not worthy," Beck told Business Insider.
