Trump made the accusation in a series of tweets, without citing evidence, just weeks into his administration and amid rising scrutiny of his campaign's ties to Russia.
"Neither President Obama nor any White House official ever ordered surveillance on any U.S. citizen. Any suggestion otherwise is simply false," Obama spokesman Kevin Lewis said in a statement.
However, Trump's tweets caught his aides by surprise, with one saying it was unclear what the president was referring to.
Members of Congress have also said Trump's allegations require investigation or explanation.
U.S. Representative Adam Schiff, the top Democrat on the House Intelligence Committee, has called Trump's assertion a "spectacularly reckless allegation.
"If there is something bad or sick going on, it is the willingness of the nation's chief executive to make the most outlandish and destructive claims without providing a scintilla of evidence to support them," Schiff said.
Senator Ron Wyden, a Democrat, tweeted, "Either FBI is talking to the subject of an investigation or Trump is making it up. Either way Americans deserve explanation."
Earlier, former Obama adviser Ben Rhodes strongly denied Trump's allegations.
"No president can order a wiretap. Those restrictions were put in place to protect citizens from people like you," Rhodes wrote on Twitter.
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