"I know we can accomplish more by working together than we can by working alone," U.S. Energy Secretary Stephen Chu said at a press briefing with Chinese officials.
Chu said the United States and China would commit an initial $15 million to the project, which will also focus on new technology to reduce and sequester carbon dioxide emissions from burning coal.
Both countries depend heavily on coal, the most carbon-intensive fossil fuel, and would likely do so for some time to come, he said.
Chu and U.S. Commerce Secretary Gary Locke, both Chinese-Americans, have focused on boosting clean energy cooperation with China on their first trip to the Asian giant since joining President Barack Obama's administration.
China has recently surpassed the United States as the world's biggest emitter of greenhouse gases, and together they account for about 40 percent of the carbon dioxide pumped into the air each year.
Cooperation between the two is considered essential if countries are to agree on a new international treaty to reduce greenhouse gas emissions when they meet in Copenhagen in December.
"Both sides expressed the will... to meet the global challenges to address climate change and the energy shortage," said Wan Gang, China's minister for science and technology.
Chu told Chinese State Counselor Liu Yandong it was possible to increase the energy efficiency of new buildings four or five times "at the same price."
Working on "the fuel-efficient cars of tomorrow" and other clean energy projects will also create millions of jobs in both countries, Chu said.
China has resisted pressure in the climate negotiations to cap its greenhouse gas emissions on the grounds that it would jeopardize economic growth. But Beijing has taken steps on its own to improve energy efficiency and to boost the use of renewable fuels.
Locke, in an interview with Reuters, said the United States was looking to China to do more in the climate talks.
"The view of many is that focusing simply on energy efficiency and conservation would not be enough to address climate change," Locke said.