The World Press Freedom Index 2006, published by the Paris-based Reporters Sans Frontieres (RSF), showed that the US had dropped 12 places to 53rd place, below countries such as Ghana, Mali and Bolivia.
The organisation said "the steady erosion of press freedom in the United States, France and Japan is extremely alarming".
RSF said George Bush, the US president, had used national security as a pretext to regard journalists who questioned the "war on terror" as suspicious.
The group also criticised the US for continuing to hold the Aljazeera cameraman, Sami al-Hajj, without trial at the Guantanamo Bay prison camp and for imprisoning Josh Wolff, a freelance journalist and blogger who refused to hand over material.
The US State Department would not comment on the new RSF Press Index to Aljazeera.net, citing that it had no knowledge of the report.
In an interview with Aljazeera.net, Lucy Dalglish of the Reporters Committee for Freedom of the Press said it was important to consider that the US was still a comparatively safe place for journalists to work.
"Despite going down the ranks, I think that the US is one of the best places in the world to work as a journalist, and one of the safest," she said.
"The steady erosion of press freedom in the United States, France and Japan is extremely alarming"
Reporters Sans Frontieres
Dalglish said that improvements by other countries may account for the US dropping down the Press Freedom Index.
"In the last couple of years, there has been no serious change for the worse in the US. Other countries may have made substantial improvements in their press freedoms and leapt ahead of the US, rather than US press freedom taking a real turn for the worse," she said.
However, Dalglish said that the US administration had made "veiled threats" against some journalists, accusing them of "espionage" in order to encourage them to self-censor material.
Japan fell 14 places to 51st place and France slipped five places to 35th to make a fall of 24 places in five years.
The five most repressive states were the same as last year. North Korea came bottom of the list of 168 countries, behind Turkmenistan, Eritrea, Cuba and Myanmar, also known as Burma.
North Korea, at the centre of a row over its recent nuclear test, has further clamped down on media freedoms, RSF said.
"Other countries may have made substantial improvements in their press freedoms and leapt ahead of the US, rather than US press freedom taking a real turn for the worse"
Reporters Committee for Freedom of the Press
The country with the freest press was Finland, followed by Iceland, Ireland, Holland and the Czech Republic.
Bolivia was praised for moving into the top 20 for the first time, as was Ghana for rising 32 places to 34th this year.
Northern African states were also highlighted by the report for having made some improvements.
Algeria and Morocco treated the media better than in previous years and Libya allowed RSF to enter the country and meet officials for the first time.
Denmark, which came top of the 2005 index, dropped to 19th place following the threats against the authors of the controversial cartoons depicting the prophet Mohammed that were published last year.
RSF also said that press freedoms suffered in states ravaged by conflict, such as Lebanon, Israel and Sri Lanka.
The group said continued fighting between the Sri Lankan government and rebels had driven the country's ranking down from 51st in 2002 to 141st in 2006.