In a series of orders related to the military that Trump told reporters he had signed on Air Force One, he also called for the building of a US version of Israel's Iron Dome missile defense system.
The Republican signed further orders reinstating service members dismissed for refusing to take the Covid vaccine, and extending a wider government crackdown on diversity programs to the armed forces.
"To ensure that we have the most lethal fighting force in the world, we will get transgender ideology the hell out of our military," Trump told a Republican congressional retreat earlier in Miami.
Trump has previously promised to bring back a ban on transgender troops and demonized any recognition of gender diversity.
In his order, Trump claimed the armed forces "have been afflicted with radical gender ideology to appease activists" and that "many mental and physical health conditions are incompatible with active duty."
The order said "adoption of a gender identity inconsistent with an individual's sex conflicts with a soldier's commitment to an honorable, truthful, and disciplined lifestyle, even in one's personal life."
"A man's assertion that he is a woman, and his requirement that others honor this falsehood, is not consistent with the humility and selflessness required of a service member," it added.
The orders came at the start of Trump's second week back in the White House and on the day a welcome ceremony was held at the Pentagon for his new defense secretary, military veteran and Fox News personality Pete Hegseth.
"Thank you for your leadership Mr. President. We will execute!" Hegseth -- who was confirmed last week despite concerns over his inexperience, and alleged record of heavy drinking and domestic violence -- said on X.
Transgender Americans have faced a roller coaster of changing policies on military service in recent years, with Democratic administrations seeking to permit them to serve openly while Trump has repeatedly sought to keep them out of the ranks.
The US military lifted a ban on transgender troops serving in the armed forces in 2016, during Democrat Barack Obama's second term as president.
Under that policy, trans troops already serving were permitted to do so openly, and transgender recruits were set to start being accepted by July 1, 2017.
- 'Patriots' -
But the first Trump administration postponed that date to 2018 before deciding to reverse the policy entirely, sparking criticism from rights groups.
Trump's Democratic successor Joe Biden moved to reverse the restrictions just days after he took office in 2021, saying all Americans qualified to serve should be able to do so.
While the number of transgender troops in the US military is fairly small -- with estimates of around 15,000 out of more than two million uniformed service members -- their dismissal would reduce US forces at a time when the country is already facing difficulties recruiting new personnel.
Biden's defense secretary Lloyd Austin appeared to criticize Trump's plans during a farewell address earlier this month, saying: "Any military that turns away qualified patriots who are eager to serve is just making itself smaller and weaker."
Transgender issues have roiled US politics in recent years, as states controlled by Democrats and Republicans have moved in opposite directions on policies ranging from medical treatment to what books on the topic are allowed in public or school libraries.
Trump has meanwhile repeatedly promised to build a version of the Iron Dome system that Israel has used to shoot down missiles fired by Hamas from Gaza and Hezbollah in Lebanon.
But he ignored the fact that the system is designed for short-range threats, making it ill-suited to defending against intercontinental missiles that are the main danger to the United States.
"We need to immediately begin the construction of a state-of-the-art Iron Dome missile defense shield," Trump said in Miami, adding that it would be "made right here in the USA."
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