The State Department designated Ansar Dine following a similar action by the U.N. Security Council.
The government said the group received backing from al-Qaida in the Islamic Maghreb since the Malian organization was founded in 2011. It accused Ansar Dine of fighting alongside AQIM as it captured key towns in Mali, including the northern cities of Gao and Timbuktu.
French forces were called on to support Malian military efforts to take on northern militants who seized territory following a coup in early 2012. Ansar Dine executed more than 80 Malian troops following the coup.
"Before the French intervention in January 2013, Malian citizens in towns under Ansar Dine's control who did not comply with Ansar Dine's laws faced harassment, torture, or execution," the State Department said.
International human rights groups and U.N. officials expressed concern that Malian forces may exact revenge on communities believed to have supported northern militants.
The U.S. government in February sanctioned Ansar Dine leader Iyad ag Ghali.
Notable deaths of 2014 [PHOTOS]