The incident has been called an "unsafe" encounter between the two ships by Pentagon officials, and at one point the Chinese ship was reportedly around 45 yards from the American vessel.
"A [Chinese] Luyang destroyer approached USS Decatur in an unsafe and unprofessional manoeuvre in the vicinity of Gaven Reef in the South China Sea," Captain Charles Brown, a spokesman for US Pacific Fleet, said in a statement.
Mr Brown said that the Chinese ship "conducted a series of increasingly aggressive manoeuvres accompanied by warnings for the Decatur to depart the area".
The US warship was in waters near the disputed Spratly Islands in the South China Sea. The crew was conducting a freedom of navigation routine, which is a regular mission and intended to ensure open trade routes.
The close encounter comes as the US and China have seen an increasingly tense relationship, with the two super powers disagreeing over trade policy, and on issues related to election meddling. Just recently, officials with the Department of Defence told CNN that Defence Secretary James Mattis has cancelled a planned trip to Beijing later in October.