Ex-national security adviser Michael Flynn has pleaded guilty to making false statements to the FBI about meetings with Russia's ambassador weeks before Donald Trump became president.
The charges were brought by Special Counsel Robert Mueller, as part of his inquiry into alleged Russian meddling in the 2016 US election.
Mr Flynn is the most senior member of the administration to be indicted.
He also revealed he was co-operating with Mr Mueller's inquiry.
Significantly, a statement made by Mr Flynn to prosecutors appears to implicate a more senior, though unnamed, Trump team official - indicating the direction in which Mr Mueller's investigation may be heading.
US media outlets, including NBC News, Bloomberg and the Washington Post, said that Jared Kushner - Mr Trump's adviser and son-in-law - is heavily implicated by Mr Flynn's plea deal.
What happened in court?
Appearing in a federal court in Washington DC, he admitted to one count of knowingly making "false, fictitious and fraudulent statements".
According to an AFP reporter in court, the judge accepted Mr Flynn's guilty plea and said he would not face trial.
Mr Flynn then issued a statement in which he said: "I recognize that the actions I acknowledged in court today were wrong and, through my faith in God, I am working to set things right".
He said his plea and co-operation deal "reflect a decision I made in the best interests of my family and of our country". The retired Army lieutenant-general is unlikely to serve more than six months in prison.
The White House issued a statement saying that "nothing about the guilty plea or the charge implicates anyone other than Mr Flynn". A presidential appearance in front of reporters was then cancelled.
As he was escorted from court by FBI agents, a handful of protesters shouted "criminal" and "lock him up", echoing a chant he led against Hillary Clinton during the Republican party convention last year.
What are the charges?
Mr Flynn was forced to resign 23 days into his job in February, a month after he was questioned by the FBI for misleading the White House about meeting then Russian ambassador Sergei Kislyak during the transition period, before Mr Trump took office.
Then, just over a week ago, US media said his legal team had told the president's lawyers they could no longer discuss the case, prompting suggestions that he had begun co-operating with prosecutors.
Who is Michael Flynn?
It is not clear why he did not tell the truth to investigators. But it is illegal for a private US citizen, as Mr Flynn was during the transition, to conduct foreign affairs without the permission or involvement of the US government.
According to the charge sheet, Michael Flynn is accused of:
falsely telling FBI agents that on or about 29 December 2016 he did not ask Mr Kislyak to "refrain from escalating the situation in response to sanctions that the United States had imposed against Russia that same day"
failing to recall that Mr Kislyak had later told him Russia was moderating its response to the sanctions as a result of his request
falsely saying that, on or about 22 December 2016, he did not ask Mr Kislyak to "delay the vote on or defeat a pending United Nations Security Council resolution". The discussion came a day before the Obama administration decided not to veto a resolution asserting that Israeli settlements on occupied Palestinian territory "had no legal validity"
making false statements about the Turkish government's involvement and supervision of a project that his intelligence company was taking part in.
Mr Flynn is not the first former Trump official to be charged.
In October, Mr Trump's former campaign manager, Paul Manafort, and his business associate Rick Gates were accused of conspiring to defraud the US in dealings with Ukraine (both deny the charges). Another ex-aide, George Papadopoulos, has also pleaded guilty to making false statements to FBI agents
How damaging is this for President Trump?
By Anthony Zurcher, BBC News North America reporter
Michael Flynn lost his prized national security adviser post because of December 2016 conversations he had with Sergei Kislyak. Now he's facing criminal charges.
That's bad news for Mr Flynn, but it could be even worse news for Donald Trump, who reportedly directly lobbied former FBI Director James Comey to back off the Flynn investigation before firing the top law man.
Mr Flynn has told Robert Mueller's team that he spoke with Trump presidential transition officials before and after reaching out to Mr Kislyak, and was instructed on how to handle the call. This contradicts public assertions made by the president himself that Mr Flynn was operating independently and against orders.
If the former national security adviser has evidence that corroborates his claims, it would be the biggest bombshell yet in this wide-ranging investigation.
It's clear the independent counsel investigation is casting a very wide net, and Mr Mueller just landed his biggest fish yet.