The top US general has said China's suspected hypersonic missile test is close to a Sputnik moment, referring to the Soviet satellite launch that sparked a Cold War arms race.
Chairman of the Joint Chiefs of Staff Mark Milley said in an interview with Bloomberg News that the Chinese military was "expanding rapidly".
The Financial Times reports that the test stunned the US military.
Beijing denies any missile test, saying instead it was a spacecraft.
"What we saw was a very significant event of a test of a hypersonic weapon system. And it is very concerning," Gen Milley told Bloomberg.
"I don't know if it's quite a Sputnik moment, but I think it's very close to that. It has all of our attention."
His comment is the first official acknowledgement by the US of claims that China conducted two missile tests over the summer. Reports indicate that it was a nuclear-capable missile that could evade US air defence systems.
The 1957 Soviet satellite launch of Sputnik shocked Americans, who feared the Soviets were pulling ahead in technological ability.
The event spurred President John F Kennedy to declare the US would land men on the Moon, a goal achieved in less than a decade.
Pentagon spokesman John Kirby refused to comment on the general's remarks, saying: "This is not a technology that is alien to us, that we haven't been thinking about for a while."
He added that the US was working to strengthen defence systems and pursuing its own hypersonic capabilities.
Hypersonic missiles are capable of travelling at five times the speed of sound.
They are considered more manoeuvrable than conventional missiles and more capable of avoiding interception from air defence.
Last week the US conducted three hypersonic missile tests at a Nasa facility in Virginia.
The tests will be used to "inform the development" of future hypersonic missiles, US officials said.
Gen Milley also warned that the Chinese military had grown "from a peasant-based infantry army that was very, very large in 1979 to a very capable military that covers all the domains and has global ambitions".
According to CNN, CIA Director Bill Burns described China last week as the greatest technological threat to the United States. Earlier this month he said the spy agency would boost its efforts towards China.
President Joe Biden's White House has characterised the US-Chinese relationship as one of "strategic competition".
Gen Milley last month faced calls to resign and was accused of treasonous behaviour after it was reported that he had assured his Chinese counterpart in the last days of the Trump administration that the US would not launch a nuclear strike.
The chairman of the joint chiefs of staff later said the calls were "perfectly within the duties and responsibilities" of his job.