Gen John Campbell said in a statement that he had served multiple tours in Afghanistan and no such policy existed.
The allegations emerged in the New York Times on Sunday.
The paper based its report on accounts from numerous soldiers and the father of a marine who was killed in 2012.
"My son said that his officers told him to look the other way because it's their culture," Gregory Buckley Sr was quoted by the New York Times as saying.
The paper said that rampant sexual abuse of children has long been a problem in Afghanistan, especially among armed commanders in rural areas.
Citing interviews with numerous military witnesses, it said that the practice is called bacha bazi, literally meaning "boy play", and US soldiers and Marines were ordered not to intervene - even in those cases where Afghan allies abused boys on military bases.
"Soldiers and Marines have been increasingly troubled that instead of weeding out paedophiles, the American military was arming them in some cases and placing them as the commanders of villages - and doing little when they began abusing children," the paper said.
It said that the US non-intervention policy was intended to maintain good relations with the Afghan police and militia units trained by America to fight the Taliban.
"It also reflects a reluctance to impose cultural values in a country where pederasty is rife, particularly among powerful men, for whom being surrounded by young teenagers can be a mark of social status," it said.
Similar allegations were reported by Canadian Nato troops in 2008.
But Gen Campbell, who commands US and allied forces in Afghanistan, in response said that he had discussed the media reports with Afghan President Ashraf Ghani and had concluded that there was no substance to them.
"I want to make absolutely clear that any sexual abuse or similar mistreatment of others, no matter the alleged perpetrator or victim, is completely unacceptable and reprehensible," his statement said.
It went on to say that all US military personnel in Afghanistan were expected to treat others with dignity and report any suspicions of sexual abuse to the chain of command, "regardless of who the alleged perpetrators of victims are".
"I have personally spoken with [Afghan] President Ghani on the issue and he made it clear to me that the Afghan government will not tolerate the abuse of its children, or any of its people, and will thoroughly investigate all allegations and deliver justice appropriately."
The senior Nato commander in Afghanistan has denied reports that the Pentagon ordered US troops to overlook the sexual abuse of young boys by Afghan police and militias.