The agency director James Comey said this lifting a cloud of uncertainty over Mrs Clinton's White House campaign.
- FBI says Clinton's handling of emails "extremely careless"
- Trump says outcome means system is "rigged"
- Justice Department has said it will accept FBI recommendations
The Federal Bureau of Investigation found evidence of "extremely careless" handling of emails by Mrs Clinton and that at least 110 emails contained classified information when they were sent, Mr Comey said, announcing the result of a yearlong investigation.
Mr Comey's conclusion that Mrs Clinton did send and receive classified information, and in some cases top secret, contradicts repeated assertions from Mrs Clinton.
But, he said, the FBI concluded "no reasonable prosecutor" would bring charges against the presumptive Democratic presidential nominee.
"Although the Department of Justice makes final decisions on matters like this, we are expressing to Justice our view that no charges are appropriate in this case," Mr Comey told reporters in Washington.
His recommendation will likely stand. The country's top prosecutor, US Attorney General Loretta Lynch, said on Friday that she would accept the recommendations of career prosecutors and the FBI director on whether to charge Mrs Clinton for mishandling emails.
The FBI probe has dogged Mrs Clinton for the past year, contributing to her low poll ratings on honesty and trustworthiness.
Republicans pointed to the controversy as evidence that she considered herself above the law.
Donald Trump, Mrs Clinton's Republican rival in the November 8 election, has hammered her on the issue, saying the investigation should disqualify her from being president. On Tuesday, he said the FBI decision was unfair.
"The system is rigged," he said on Twitter. "As usual, bad judgment."
Mr Comey's announcement came hours before Mrs Clinton's first campaign appearance with President Barack Obama, set for later on Tuesday in North Carolina.
It also came less than three weeks before the start of the Democratic National Convention at which Mrs Clinton is to be nominated.
'Glad the matter is resolved': Clinton campaign
The FBI has been investigating whether Mrs Clinton broke the law as result of personal email servers kept in her Chappaqua, New York, home while she was secretary of state from 2009 to 2013.
One of the questions is whether she mishandled classified information on the servers.
The Clinton campaign issued a statement saying it was "pleased" with the FBI decision.
"As the secretary has long said, it was a mistake to use her personal email and she would not do it again. We are glad that this matter is now resolved," spokesman Brian Fallon said.
Mrs Clinton has repeatedly said she never sent or received classified information on her private servers.
Mr Comey said, however, there was "evidence of potential violations of the statutes regarding the handling of classified information".
But he said the FBI did not find that Mrs Clinton or her colleagues intended to violate the law, and that there was no "intentional misconduct" by her lawyers who sorted her emails.
He said her staff should have known Mrs Clinton's private email was an improper place for classified information, but there was no evidence that anyone had hacked Mrs Clinton's communications.
Mr Comey said there were no previous cases that supported filing criminal charges against Mrs Clinton.
Other cases had involved intentional mishandling of information, he said, and there was no evidence Mrs Clinton knew she was violating the law.
Republicans hit out at FBI recommendation
Last year, the FBI recommended that former CIA director David Petraeus be charged with a felony for his mishandling of classified information with his biographer, with whom he was having an affair.
In that case, however, the FBI had evidence that Mr Petraeus knew the information was highly classified. Mr Petraeus eventually pleaded guilty to a misdemeanour charge of mishandling classified information.
Republican politicians have called for an independent investigation of Mrs Clinton, saying they do not trust the Justice Department to handle the inquiry with impartiality.
Republican criticism of the process heated up after Mrs Clinton's husband, former president Bill Clinton, met privately with Attorney-General Lynch in Phoenix last week.
Ms Lynch, who was appointed by Mr Obama, later said she regretted the meeting and said she and Mr Clinton did not discuss the investigation.
House of Representatives Speaker Paul Ryan, the highest ranking elected Republican, said Mr Comey's announcement "defies explanation".
"Based upon the director's own statement, it appears damage is being done to the rule of law," Mr Ryan said.
"Declining to prosecute Secretary Clinton for recklessly mishandling and transmitting national security information will set a terrible precedent.
"The American people will reject this troubling pattern of dishonesty and poor judgment."