David Cameron regards comments made by US presidential hopeful Donald Trump as "divisive, unhelpful and quite simply wrong", Downing Street has said.
Mr Trump called for a ban on Muslims entering the United States following a mass shooting in San Bernadino.
A Muslim couple, believed to have been radicalised, killed 14 people at a health centre.
The prime minister's official spokeswoman said Mr Cameron "completely disagrees with Donald Trump".
British prime ministers normally avoid commenting on contenders in the US presidential race.
Meanwhile, Labour leader Jeremy Corbyn said in a tweet that Mr Trump's call was "an attack on democratic values" and an "affront to common humanity".
"Let's unite against racism," he added.
Mr Trump issued a campaign statement following the San Bernardino shootings calling for "a total and complete shutdown of Muslims entering the United States until our country's representatives can figure out what is going on".
His comments were criticised by other contenders for the Republican nomination, including Jeb Bush, who called the property tycoon "unhinged".
Campaigners against Mr Trump's golf course development in Scotland have submitted a petition to Parliament calling for him to be barred from the UK "for his continued, unrepentant hate speech and unacceptable behaviour".
Mr Cameron's spokeswoman declined to say whether he would be willing to meet Mr Trump or whether he could be barred from the UK, describing the questions as "hypothetical".
She added: "The prime minister has been very clear that, as we look at how we tackle extremism and this poisonous ideology, what politicians need to do is look at ways they can bring communities together and make clear that these terrorists are not representative of Islam and indeed what they are doing is a perversion of Islam."
Mr Trump caused further controversy on Tuesday when he claimed that parts of London were "so radicalised the police are afraid for their lives".
The Mayor of London Boris Johnson responded by saying the "ill-informed comments are complete and utter nonsense".
He added: "As a city where more than 300 languages are spoken, London has a proud history of tolerance and diversity and to suggest there are areas where police officers cannot go because of radicalisation is simply ridiculous.
"I would welcome the opportunity to show Mr Trump first hand some of the excellent work our police officers do every day in local neighbourhoods throughout our city. Crime has been falling steadily both in London and in New York - the only reason I wouldn't go to some parts of New York is the real risk of meeting Donald Trump."
The Conservative Party candidate for London Mayor, Zac Goldsmith, described Mr Trump as "an utterly repellent figure" and "one of the most malignant figures in politics".
Sadiq Khan, Labour's candidate for Mayor of London, said: "Donald Trump doesn't have a clue about London. He is clearly ignorant about London's tolerance and diversity and also about how unified we are as a city.
"Trump can't just be dismissed as a buffoon - his comments are outrageous, divisive and dangerous - I condemn them utterly them and hope his campaign dies a death."
UKIP leader Nigel Farage told BBC News: "Mr Trump's somewhat kneejerk reaction to this, saying that all Muslims should be banned from coming into America, was, perhaps, for him, a political mistake too far."