Extract from ABC News
"I am responsible for ensuring that the positions we take in court remain consistent with this institution's solemn obligation to always seek justice and stand for what is right," Ms Yates said.
"At present, I am not convinced that the defence of the executive order is consistent with these responsibilities, nor am I convinced that the executive order is lawful."
The Democratic appointee's directive was likely to be temporary, given that Senator Jeff Sessions, Mr Trump's pick for attorney-general, will likely move to uphold the president's policy.
Mr Sessions is awaiting Senate confirmation.
Still, Ms Yates's abrupt decision deepened the chaos surrounding Mr Trump's order.
At least three top national security officials — Defence Secretary James Mattis, Homeland Security Secretary John Kelly and Rex Tillerson, who is awaiting confirmation to lead the State Department — have told associates they were not aware of details of directive until around the time Mr Trump signed it.
Tennessee senator Bob Corker, the top Republican on the Senate Foreign Relations committee, said that despite White House assurances that congressional leaders were consulted, he learned about the order in the media.
The fallout was immediate, with friction growing between Mr Trump and his top advisers and a rush by the Pentagon to seek exemptions to the policy.
The White House approach also sparked an unusually public clash between a president and the civil servants tasked with carrying out his policy.
White House divide deepens as Trump doubles downA large group of American diplomats circulated a memo voicing their opposition to the order, which temporarily halted the entire US refugee program and banned all entries from seven Muslim-majority nations for 90 days.
In a combative response, White House spokesman Sean Spicer challenged those opposed to the measure to resign.
"They should either get with the program or they can go," Mr Spicer said.
The blowback underscored Mr Trump's tenuous relationship with his own national security advisers, many of whom he met for the first time during the transition, as well as with the Government bureaucracy he now leads.
While Mr Trump outlined his plan for temporarily halting entry to the US from countries with terror ties during the campaign, the confusing way in which it finally was crafted stunned some who have joined his team.
Mr Mattis, who stood next to Mr Trump during the signing ceremony, is said to be particularly incensed.
A senior US official said Mr Mattis, along with Joint Chiefs chairman Joseph Dunford, was aware of the general concept of Mr Trump's order, but not the details.
US officials and others with knowledge of the Cabinet's thinking insisted on anonymity in order to disclose the officials' private views.
Video: Nine further people were released from Dallas airport detention overnight (ABC News)