Some 9,000 more victims were identified around the world than in 2010, the state department report said.
But the number is just a fraction of the estimated 800,000 people trafficked across borders every year.
Conflict-wracked Syria was relegated to the category of worst offenders, while seven other states came off that list.
Syria's Middle Eastern neighbour Lebanon and Burma were among those judged to have improved their efforts to combat what the state department terms "modern-day slavery".
Syria was identified as a transit country for Iraqi women and girls, South East Asians and East Africans being trafficked for a life of prostitution in Europe, the Trafficking in Persons (TIP) report said.
In addition, thousands of women from several nations have been left working as forced domestic servants inside Syria as the conflict escalates.
At least 95 Filipina women remained trapped inside the cities of Homs and Hama at the end of 2011, the International Organization for Migration said.
Syria's government was making "no discernible effort" to identify and protect victims of trafficking, the report said, and could now be subject to US sanctions for dropping into the bottom tier.
Describing the report as a "clear and honest assessment", US Secretary of State Hillary Clinton said: "The end of legal slavery in the United States and around the world has not meant the end of slavery."