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:
New York state has 173 active cases, the most in the US, and 108 of them are in Westchester County, where New Rochelle is located.
New York City, 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 New Rochelle (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.
Officials will also set up a coronavirus testing facility at a local hospital.
“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.”
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.
Natalie Sherman, BBC Business, New York
Economists say the coronavirus outbreak presents the greatest risk to the US economy in more than a decade, but for now it is not clear whether the tools being mobilised are up to the task.
Spurred on by plunging financial markets, the president has promised relief, proposing a payroll tax cut which would reduce the amount of money deducted from worker pay cheques to pay for social programmes.
A bit of extra cash in people’s pockets could help boost confidence but economists say much more needs to be done. They have called for paid sick leave, relief for state health programmes, loan deferrals and money mailed directly to families, among other stimuli. For now, even Mr Trump’s fellow Republicans seem unconvinced a payroll tax cut is the most effective response.
As Jay Shambaugh, director of the Hamilton Project at the Brookings Institution, told me: “If we don’t do enough… there’s going to be unnecessary pain in the economy that we know ways to prevent.”
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-nine people have died in the US as a result of the virus – 24 in Washington state, two in California, two in Florida and one in New Jersey.
The director of the National Institute of Allergy and Infectious Diseases, Dr Anthony Fauci, has urged Americans to “start taking seriously” the risk of infection.
“Although we keep coming in and saying, appropriately, as a nation, the risk is relatively low, there are parts of the country right now that are having community spread where the risk is more than that and you know the places – Washington state, California, New York, Florida,” he said at a White House briefing.
“We would like the country to realise that as a nation, we can’t be doing the kinds of things we were doing a few months ago. That it doesn’t matter if you’re in a state that has no cases, or one case, you have to start taking seriously what you can do now.”
Pointing to government guidelines on keeping communities and workplaces safe, he added: “This should be universal for the country… Everybody should say, ‘All hands on deck, this is what we need to do.'”
President Donald Trump said he had been told he did 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.
The White House has said Mr Trump did not have direct contact with the patient.
The US is working to repatriate passengers from the Grand Princess cruise that docked in California on Monday. A total of 21 individuals on the vessel have tested positive for Covid-19 thus far.
Some 140 Britons were on the cruise. The BBC understands the British passengers will be flown out of the US on Tuesday evening.
They will be advised to self-isolate for two weeks upon return to the UK, and the cruise company is expected to arrange transport for them after they land in the UK.
Mr Trump and some of his fellow Republicans have been accused of racism for referring to the disease as the “China Virus” and the “Wuhan virus”.
The disease was widely referred to by those terms after it was first reported in China in December.
But US Centers for Disease Control and Prevention Director Robert Redfield told a congressional hearing on Tuesday that it was wrong to refer to the virus as Chinese.
He pointed out that there were serious outbreaks in many countries.
The president had earlier shared a tweet saying his planned wall at the US-Mexico border would help contain the spread of the virus.
Democratic presidential front-runner Joe Biden responded by saying: “A wall won’t stop a virus. Racism won’t stop a virus. Do your job.”