"This ruling is the latest in a series of disconcerting steps in Bahrain," he said in a statement sparked by the action against the country's main Shiite opposition group Al-Wefaq, once the largest group in parliament.
The chief US diplomat took pains to acknowledge the "very real security threats facing Bahrain," but added that the "recent steps to suppress nonviolent opposition only undermine Bahrain's cohesion and security" and "strain our partnership with Bahrain."
He called on Bahrain to "reverse these and other recent measures (and) return urgently to the path of reconciliation."
The administrative court in Manama, in ordering the dissolution of Al-Wefaq, said the group had incited violence and encouraged protests that threatened "sectarian strife" in the Gulf kingdom.
But critics have deplored such moves as a crackdown on dissent.
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Bahrain is home to the US Fifth Fleet, which is responsible for US naval forces in the region, making Bahrain a crucial regional partner for the United States.
It has been the scene of sporadic troubles since government forces repressed a protest movement launched in February 2011 amid the ferment of the Arab Spring.
The country's Shia majority has been demanding a true constitutional monarchy in the country, now led by a Sunni dynasty.
