"These individuals who targeted and brutally killed a journalist who resided and worked in the United States must face consequences for their actions", Treasury Secretary Steve Mnuchin said in a statement.
Deputy public prosecutor Shaalan Shaalan told reporters in Riyadh that the role of the crown prince's former adviser Saud Al Qahtani was meeting with the team that was ordered to repatriate Khashoggi.
Among those sanctioned were Saud al-Qahtani, who has been removed from his position as a top aide to Crown Prince Mohammed bin Salman, as well as the Saudi Consul General Mohammed Alotaibi and members of a 15-person team Turkey has identified as being involved in Khashoggi's death.
He denied Prince Mohammed had any knowledge of the murder.
The kingdom also confirmed Turkish claims that a 15-man hit squad was sent to Turkey, and that these agents killed Mr Khashoggi.
Khashoggi, a frequent contributor to The Washington Post, was killed on October 2 inside the Saudi Consulate in Istanbul. King Salman seems unprepared to boot his favorite son from the role of crown prince, perhaps an indication of just how well MbS has consolidated power within the royal family.
"The Saudis will continue to push the narrative that these advisors "betrayed the prince's trust".
The New York Times has reported that in the newly surfaced audio recording, a member of the team is heard telling a superior to "tell your boss" that the mission had been completed-and that boss, according to the New York Times, is believed by US intelligent officials to be Crown Prince Mohammed bin Salman.
"They expect us to believe the killers carried this out on their own".
Those tweets were posted prior to the announcement of the sanctions.
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The source also said that president Trump has called for a new agreement to ensure that Iran does not obtain nuclear weapons. He caused controversy on Saturday by cancelling a trip to another cemetery for the war dead because of bad weather.
"Sanctions will not fix this", Attiah tweeted, calling for an global investigation into what happened to the journalist.
A US government commission found no evidence that Saudi Arabia directly funded al Qaeda, which carried out the attacks on NY and Washington.
Six weeks after the murder, Turkey is trying to keep up pressure on Prince Mohammed and has released a stream of evidence that undermined Riyadh's early denials of involvement.
Turkey says the Saudi critic was strangled and his body dismembered for secret disposal; the Saudi prosecutor says a "forensics expert" had been part of the team - but only "in the case force had to be used to return the victim".
The sanctions are being imposed under the Global Magnitsky Act, a U.S. law that empowers the United States to sanction human rights abusers overseas.
The Trump White House, meanwhile, has approached the crisis cautiously.
At least 21 people in total were in custody.
Prince Mohammed, the son of King Salman and Saudi Arabia's de facto ruler, has denied any role in what he has called a "heinous crime that can not be justified".
That's been disputed by several United States politicians, however.
Asked about possible worldwide sanctions in response to the case, Jubeir said there was a difference between sanctioning individuals and holding the Saudi government responsible.
"I'd be shocked if that turns out to be true".