This week 43 Catholic institutions, including the Archdioceses of New York and Washington DC as well as Notre Dame University, sued the Obama administration over its mandate requiring employers to provide contraception in their health insurance plans.
The move not only escalated an unusual fight between church and state but also threatened to cause splits within the Catholic Church itself.
The Catholic Bishop of Stockton, California, Stephen Blaire, told America magazine that he was concerned the campaign against the mandate was becoming too political.
He said he was worried his fellow bishops were being co-opted by political conservatives.
"Some groups very far to the right are trying to use the conflict as an 'anti-Obama campaign'."
His comments were the first public indication of a split in the fraternal hierarchy, which up to this point has been of one voice in its opposition to the mandate.
The mandate - due to come into force on 1 August - requires employers to cover reproductive services, including contraception.
The Catholic Church teaches that artificial contraception is wrong and opponents of this mandate further argue that it covers abortion-inducing drugs. Supporters, including many lay Catholics, dispute this.
The church itself is exempted from the rule, but many Catholic institutions, including hospitals, schools and charities, are not automatically exempted and must apply for one.
After the initial row erupted in January, President Barack Obama offered a compromise. Religious institutions would not have to provide the extended coverage, but the insurance companies would pay for it.
At first that seemed to meet with some approval from the US Catholic Bishops Conference, as well as from Notre Dame University, but that is no longer the case.
Some Catholic bodies self-insure so they would not be one step removed from covering something they say violates their religious conscience.
'Strangling and narrow'
And the row has intensified as it has evolved into one about "religious liberty".
Cardinal Timothy Dolan, the Archbishop of New York, has led the charge by saying Catholic organisations will have to prove themselves Catholic enough in order to qualify for an exemption from the mandate.
"The exemption given to the churches is so strangling and is so narrow. And it's also presumptuous in that a bureau of the federal government is attempting to define for the church the extent of its ministry."
It is, for opponents, a violation of the First Amendment, which protects religion from state interference.
The US Catholic Bishops Conference has called on Catholics to join in 14 days of prayer and public action to defend religious liberty, as they put it, from 21 June to 4 July.
But some Catholic bodies have indicated they can work with Mr Obama's compromise. Meanwhile, some Catholic groups have been vocal in criticising their church leadership.
James Salt, Executive Director of Catholics United, decried the idea that religious liberty is at stake in America.
"There's certainly the appearance that the Catholic bishops are pursuing a right-wing political agenda," he said, adding: "It's driving Catholics away from the faith."
The row could not have come at a more sensitive time politically, with just a few months to go until the presidential election.
In recent years the Catholic vote has been much talked about. While there is no Catholic bloc vote - Hispanic Catholics lean Democratic, for example, but non-Hispanic white Catholics are seen to be a key independent voting constituency and many of them live in important swing states.
One of them is Pennsylvania, where the church hierarchy recently sponsored a day of fasting and prayer in response to what it called "an unprecedented and gross infringement" of religious liberty.
Recent polls suggest a shift in the last few weeks among Catholics away from Mr Obama. A Gallup survey found Mr Obama's support at 46%.
According to some election-watchers this is not coincidental and is at least in part attributable to the fight the Obama administration has picked - intentionally or not - with the Catholic Church.