Speaking from the White House's Rose Garden, he said the plan would make the United States "the envy of the modern world."
Under the system, asylum seekers with "frivolous" claims and unaccompanied minor children would "humanely" be sent back to their home countries.
"If you have a proper claim, you will quickly be admitted. If you don't, you will be promptly returned home," Trump said.
His plan includes replacing existing green cards with what he called a "Build America Visa," which would be granted to immigrants on a new points-based system.
"You will get more points for being a younger worker, meaning you will contribute more to our social safety net," Trump said. "You will get more points for having a valuable skill and offer of employment and advanced education or a plan to create jobs."
Immigrants will be required to pass a civics exam and to learn English. Priority also would be given to higher-wage and higher-skilled workers.
"To protect benefits from American citizens, immigrants must be financially self-sufficient," Trump added.
Trump also seeks to put an end to what he's frequently referred to as "chain migration," and allow only nuclear families to migrate together.
"If adopted, our plan will transform America's immigration system into the pride of our nation and the envy of the modern world," he said.
What Trump's plan doesn't include is any mention of the Deferred Action for Childhood Arrivals program. Some members of Congress, who would need to pass legislation to implement the plan, took issue with the lack of DACA in the proposal.
House Speaker Nancy Pelosi of California, speaking during her weekly news conference, said she seeks bipartisan immigration reform that includes protections for those under the DACA program -- the dreamers.
She said the word "merit" is "condescending."
"Are they saying family is without merit?" she asked.
Also Thursday, Palm Beach County Mayor Mack Bernard said he was told the federal government may move migrants from the U.S.-Mexico border to South Florida. They would be transported there and then given a notice to appear at a future court date.
"First of all, I'm concerned about how it would impact our resources in Palm Beach County," Bernard said. "I'm concerned about just the administration bringing people to Palm Beach County and potentially dropping them off and leaving them as the responsibility of Palm Beach County and the community."
He said the healthcare and court systems could be impacted by the move.