"There are certain requirements that need to be met under the law and regulations of the governing statute," he told reporters on Thursday. "In our judgment, we are not at this point ready to take them off of that list."
The state department is to release its latest yearly report on state sponsors of terrorism next week.
Along with Libya - which was added to the list in December 1979 after the bombing of the US embassy in Tripoli - Cuba, Iran, North Korea, Sudan and Syria are on the current list.
McCormack declined to specify which issues were keeping Libya on the list but said "you can see a positive trajectory to the relationship between the United States government and Libya over the past several years".
Libya on Saturday will mark the 20th anniversary of US missile attacks on Tripoli that killed 40 people, including young children.
US forces bombed Tripoli and Benghazi in the early hours of April 15, 1986, in retaliation for what President Ronald Reagan said was Libyan complicity in the bombing of a discotheque in Berlin a month earlier, in which three people including a US serviceman were killed.
Some Libyans say the lack of a US apology hinders renewed efforts by both sides to build trust.