The US has urged Pakistan to re-arrest and charge cleric Hafiz Saeed, who is accused by the US and India of masterminding the 2008 Mumbai attacks.
Mr Saeed, who had been under house arrest since January, was released on Thursday after a court rejected arguments that he was a threat.
The state department said Mr Saeed's organisation Lashkar-e-Taiba (LeT) had killed hundreds, including Americans.
Mr Saeed has denied involvement in the Mumbai attacks, which killed 165.
The 60-hour assault targeted luxury hotels, Mumbai's main railway station and a Jewish cultural centre.
"The Pakistani government should make sure that he is arrested and charged for his crimes," state department spokeswoman Heather Nauert said.
The $10m (£7.5m) bounty for information leading to Mr Saeed's conviction, first offered in 2012, still stood, she added.
The decision to put Mr Saeed under house arrest in January was seen as a response to actions by US President Donald Trump's White House against nations deemed linked to terrorism.
Addressing his supporters after his release in Lahore, Mr Saeed termed former prime minister Nawaz Sharif a "traitor" for seeking peace with neighbouring India.
The cleric founded LeT in the 1990s and, when that was banned, he revived a much older organisation, Jamaat-ud-Dawa (JuD) in 2002.
Mr Saeed maintains JuD is a Islamic welfare organisation, but the US says it is a front for LeT.
In a rare interview in 2014, Hafiz Saeed told the BBC he had nothing to do with the Mumbai attacks, calling evidence against him "just propaganda" by India.
India accuses Mr Saeed and his organisation of carrying out several militant attacks on its territory - but Pakistan has maintained there is no evidence to put him on trial.
He has been detained in Pakistan several times.
The Pakistani government has also acknowledged that "part" of the conspiracy to attack Mumbai did take place on its soil, and that LeT had been involved.