Vice-President Joe Biden made the call during a telephone conversation with his Egyptian counterpart Omar Suleiman.
He also said the police should immediately stop arresting and beating journalists and activists.
Tuesday saw one of the biggest anti-government rallies in Cairo since the protests began on 25 January.
It came despite the government's announcement of its plans for a peaceful transfer of power.
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End Quote Jeremy Bowen BBC Middle East editorThe real test of the revolution's success or failure is whether it changes Egypt permanently”
President Hosni Mubarak has said he will stay in office until elections in September, when he plans to step down.
Mr Biden told Mr Suleiman that the transition to a more broadly based government should produce "immediate, irreversible" progress.
The US vice-president has been phoning his Egyptian opposite number on an almost daily basis and his latest call is the toughest yet, the BBC's North America editor, Mark Mardell, reports.
Mr Biden said the interior ministry should be restrained immediately and there should be a clear policy of no reprisals.
Separately, President Barack Obama's spokesman, Robert Gibbs, said Mr Suleiman's remarks about Egypt not being ready for democracy were "particularly unhelpful".
The focus now seems not to be on President Mubarak and his future but on what the White House calls "concrete reforms", our North America editor says.
So far the administration's repeated suggestions over the last week have been met largely by grudging commitments from the Egyptian authorities and little action, he adds.
'Huge support'As the protests entered their third week, hundreds of thousands of Egyptians poured into Cairo's Tahrir Square for the latest protest. Initial attempts by the army to check the identity cards of those joining the demonstration were quickly abandoned because of the sheer weight of numbers.
The BBC's Jim Muir, in Cairo, says the message to the authorities is simple - there is huge support from all walks of Egyptian life for the protests, and the government's concessions are not enough.
Wael Ghonim, a Google executive who was detained by state security forces for 12 days, often blindfolded, was feted by the crowds as he entered Tahrir Square. He is credited with setting up the page on the Facebook social network that helped galvanise protesters.
"We will not abandon our demand and that is the departure of the regime," Mr Ghonim told protesters in the square, to cheers and applause.
Large crowds also demonstrated in the second city, Alexandria, and other Egyptian towns and cities.
In his response to the protest movement that has presented by far the most serious challenge to his 30-year rule, President Mubarak has set up a committee to propose constitutional changes, and another is being formed to carry the changes out.
Among the key expected changes are a relaxation of presidential eligibility rules, and the setting of a limit for presidential terms.
Vice-President Suleiman said a third committee, expected to begin its work in the next few days, would investigate clashes between pro and anti-Mubarak groups last week and refer its findings to the prosecutor-general.
He also said President Mubarak had issued directives to stop repressive measures against the opposition.
Many protesters have said they are sceptical about any transition managed by the government.
"We don't trust them any more," Ahmed, one young Egyptian queuing to get into Tahrir Square, told the BBC. "How can Suleiman guarantee there'll be no more violence around the election after all the attacks we've seen on young people?"
Death tollThe unrest over the last two weeks has seen fierce clashes with police, and pitched battles between protesters and Mubarak supporters.
Human Rights Watch (HRW) researchers say they have confirmed the deaths of 297 people since 28 January, based on a count from seven hospitals in the cities of Cairo, Alexandria and Suez. No comprehensive death toll has been given by the Egyptian government.
Some economic activity has resumed, but authorities have delayed reopening the stock exchange until Sunday. On Friday it was estimated that the paralysis resulting from the unrest had been costing the economy an average of $310m (£193m) a day.
The number of those on Tahrir Square has been swelling each day and dropping back overnight.
Meanwhile, leaked US diplomatic cables carried on the Wikileaks website have revealed that Mr Suleiman was named as Israel's preferred candidate to succeed President Mubarak after discussions with American officials in 2008.
As Egypt's intelligence chief, he is said to have spoken daily to the Israeli government via a secret "hotline" on issues surrounding the Hamas-run Gaza Strip.
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