"After more than three days of continuous search efforts, the US Navy suspended operations to locate a sailor assigned to guided-missile destroyer USS Stethem" on Friday, the US 7th Fleet said in a statement.
The missing sailor was identified as Lieutenant Steven D. Hopkins, a Texas native, according to the US 7th Fleet.
On Thursday, China said it helped the US search for the sailor, a rare cooperative gesture in the disputed waters.
The US, Japan and China "spent 79 hours in a comprehensive search that covered roughly 10,000 square miles (25,900 square kilometres)," the US 7th Fleet said.
But they were "unable to locate" the sailor after an extensive search, Captain Jeffrey Bennett, commander of Destroyer Squadron 15, said in the statement.
The incident comes just weeks after seven American sailors were killed when their Navy destroyer collided with a Philippine-flagged cargo ship in a busy shipping channel off Japan's coast.
Aged 19 to 37, the seamen were found by divers in flooded sleeping berths a day after the collision tore a huge gash in the side of the USS Fitzgerald.
Japanese and US naval forces have been holding drills in the contested South China Sea in the face of Beijing's increasing assertiveness over its maritime claims in the region.
Beijing has pursued claims on nearly the entire territory of the South China Sea by building military facilities and conducting naval exercises -- despite partial counter-claims from nations such as the Philippines and Vietnam.
China is also involved in a simmering territorial row with Tokyo over disputed islands in the East China Sea.