The busy waterway is one of a number of flashpoints in the US-China relationship, which include a trade war, US sanctions, Hong Kong and Taiwan.
The US Navy's 7th Fleet said the destroyer USS John S. McCain "asserted navigational rights and freedoms in the vicinity of the Paracel Islands, consistent with international law."
The freedom of navigation operation upheld the rights, freedoms and lawful uses of the sea recognized in international law by challenging the "unlawful restrictions on innocent passage imposed by China, Taiwan, and Vietnam," it said.
China took full control of the Paracels in 1974 after a short battle with South Vietnamese forces. Vietnam, as well as Taiwan, continue to claim the islands.
Malaysia, Brunei and the Philippines have claims to other parts of the South China Sea, where China has been building artificial islands and constructing air bases on some of them.
The same US ship involved in this mission earlier this week transited the sensitive Taiwan Strait, drawing an angry response from Beijing.
Last month, a US aircraft carrier strike group entered the South China Sea for what the Navy said was routine operations.