Morocco has been designated a major non-Nato US ally by President Bush, in recognition of the country's support in the US-led war on terror.
The king has been described as a 'visionary leader in the Arab world'
The category also includes Israel, Egypt, Kuwait, and pro-western Asian nations.
The designation is expected to make it easier for American companies to sell arms to Morocco.
The US is also expected to sign a free-trade agreement with Morocco later this month.
"The president took this step in recognition of the close
US-Morocco relationship, our appreciation for Morocco's steadfast support in the global war on terror, and for King Mohamed's role as a visionary leader in the Arab world," a senior administration official said.
The Moroccan authorities have arrested about 2,000 people in cases linked to terrorism since it was hit by a suicide attack in Casablanca last May.
About 45 people, 12 of them bombers, were killed.
Morocco has increased its co-operation in fighting terrorism with Spain following the Madrid bomb attacks that killed 191 people.
Fourteen of the 18 people provisionally charged in connection with attacks on trains were Moroccans.
However, human rights groups have said that the anti-terror measures have eroded human rights and that suspected Islamists have been tortured by security agents.
Correspondents say the elevated status does not imply the mutual security guarantees that Washington has with its European allies.