The department promoted Azerbaijan, Congo-Brazzaville and Iraq from its Tier 2 Watch List to Tier 2. China, Russia and Uzbekistan were moved from the watch list to Tier 3 on the four-tier system.
The shifts came as, for the first time, the department was required by law to move six countries off the Tier 2 Watch List.
In announcing the annual Trafficking in Persons Report in Washington, Secretary of State John Kerry said modern-day slavery involves "literally tens of millions" of people and working to end it "can seem daunting."
"But it's the right effort. And there are countless voiceless people, countless nameless people except to their families or perhaps a phony name by which they are being exploited, who look to us for their freedom and for the possibility of life itself," Kerry said.
"It's no understatement to say that we are working to tackle an issue that millions of people assumed had been dealt with a long time ago. But the problem unfortunately persists, and I hate to say in some places can grow, and the challenge continues."
"We can make a difference. We're going to keep working with those partners around the world in order to develop new approaches and new practices. And we're going to keep engaging with governments on this issue because modern-day slavery affects every country in the world, including the United States. And every government is responsible for dealing with it, and no government is yet doing enough.
"So this report is tough, because this is a tough issue, and it demands serious attention. It's tough because in the last year roughly 46,000 victims of trafficking were brought to light worldwide, compared to the 27 million that we know are enslaved."
The Alliance to End Slavery and Trafficking praised Kerry for calling to account countries that don't show improvement in fighting human trafficking.
"The TIP report is only as good as it is honest, and we commend the State Department for using fact-based analysis -- not concern for sensitive geopolitical relationships -- when it assigned Tier 3 rankings to Russia, Uzbekistan and China," said David Abramowitz, director of the coalition of 12 U.S. human rights organizations. "China, Russia, Uzbekistan and other countries that have largely turned a blind eye to modern slavery deserve the condemnation of the United States and the international community.
"We hope that all nations Secretary Kerry has found to have serious problems will take this assessment seriously and begin immediately to develop and implement effective strategies to combat and prevent human trafficking within and across their borders."
2014: The Year in Music [PHOTOS]