New York Governor Andrew Cuomo has announced a one-mile (1.6km) coronavirus "containment zone" around a town north of New York City.
New Rochelle has seen "probably the largest cluster" of US cases, he said.
National Guard troops will be used to clean schools in the town and deliver food to any quarantined individuals.
The death toll in Italy, one of the countries worst hit by the virus, rose to 631 as the authorities placed the whole country in lockdown.
The latest increase in deaths in Italy – 168 – is the biggest the country has recorded in a single day, and the total number of cases went from 9,172 to 10,149.
Italy's death toll is the highest outside China, which recorded its lowest number of new infections, just 19, on Tuesday.
China, where the virus was first detected, has seen a total of 80,754 confirmed cases, with 3,136 deaths.
In other developments:
- The World Trade Organization suspended all meetings until 20 March after a staff member became infected
- UK virus cases reached 373 as a sixth person died
- Thousands of flights were cancelled worldwide as airlines struggled to cope with a slump in demand
Why is New York state taking this action?
The state has 173 active cases, the most in the US.
Of these cases, 108 are in Westchester County, where New Rochelle is located. New York City, which is located around 25 miles (40km) south of New Rochelle, has 36 confirmed cases of the virus in its population of eight million people.
Mr Cuomo said there would be no travel restrictions in the town (population 77,000) but large meeting points in the area would be closed.
Schools, gathering places and businesses in the virus hot spot will be closed for two weeks.
There were 804 confirmed cases of coronavirus in the US as of Tuesday afternoon, according to Johns Hopkins University in Maryland, which is tracking the outbreak.
Twenty-eight people have died in the US as a result of the virus – 23 in Washington state, two in California, two in Florida and one in New Jersey.
"It is a dramatic action, but it is the largest cluster in the country, and this is literally a matter of life and death," Mr Cuomo said, adding that numbers of cases were "going up unabated" in New Rochelle.
"You're not containing people. You're containing facilities."
Officials will also set up a coronavirus testing facility at a local hospital.
New Rochelle has a population of close to 80,000 people.
A synagogue is at the centre of the New Rochelle outbreak, local media report.
A man in his 50s who attended religious services is believed to be "patient zero" in the region. Around 1,000 people associated with the temple are now under quarantine.
President Donald Trump, meanwhile, said he has been told he does not need a coronavirus test after appearing at a conference last month that was attended by an infected individual.
Five senior Republicans, including Mark Meadows – the president's newly appointed chief of staff – announced they would be self-quarantining after interacting with the unidentified person.