Nearly four million US government workers have been hit by data breach, officials said.
Chinese hackers are suspected of carrying out the “massive breach” of the personal data of the Office of Personnel Management (OPM) employees.
OPM has confirmed that both current and past employees had been affected.
The breach could potentially affect every federal agency, officials said.
The hackers were believed to be based in China, officials said. Beijing responded by calling such claims “irresponsible”.
OPM said it became aware of the breach in April during an “aggressive effort” to update its cyber security systems.
It said it would be contacting all those individuals whose personal data may have been breached in the coming weeks, and offering them 18 months of free credit monitoring and identity theft insurance.
OPM serves as the human resource department for the federal government. The agency issues security clearances and compiles records of all federal government employees.
Information stored on OPM databases includes employee job assignments, performance reviews and training, according to officials.
The breach did not involve background checks and clearance investigations, officials said.
Susan Collins, a member of the Senate Intelligence Committee, said the hackers were believed to be based in China.
She called the breach “yet another indication of a foreign power probing successfully and focusing on what appears to be data that would identify people with security clearances”.
China denied there was any official involvement in the attack.
China’s foreign ministry spokesman Hong Lei said at a regular briefing: “Cyber attacks are generally anonymous and conducted across borders and their origins are hard to trace.
“Not to carry out a deep investigation and keep using words such as <<possible>> is irresponsible and unscientific.”
The FBI and the Department of Homeland Security are said to be investigating the latest breach.