The unexpected plea stemmed from Special Counsel Robert Mueller's intensifying investigation into Russia's role in the 2016 election and whether Trump's campaign conspired with Moscow to boost his chances, and put new pressure on the president.
Cohen, a former member of Trump's inner circle who in the past described himself as the president's "fixer," entered his guilty plea in federal court in Manhattan to one count of making false statements to two congressional panels about a real estate project Trump was pursuing while running for president in 2016.
Not long after Cohen entered his plea, Trump abruptly cancelled a meeting with Russian President Vladimir Putin scheduled to take place during this week's Group of 20 industrialized nations summit in Argentina, citing the current Ukraine crisis.
Cohen said in court that in 2017 he submitted a written statement to Congress saying all efforts relating to the real estate project in Moscow had ceased by January 2016. Cohen said that in fact these efforts continued until June 2016, after Trump had clinched the Republican presidential nomination.
The proposal to build a skyscraper bearing Trump's name in the Russian capital ultimately did not materialise. Cohen provided false statements to both the Senate and House intelligence committees to create the false impression the Moscow real estate project had ended by the time the political primary season began, the charging document said.
"He's a weak person and not a very smart person," Trump told reporters of Cohen. "He's got himself a big prison sentence. And he's trying to get a much lesser prison sentence by making up this story."
Trump, who last week submitted written answers to questions posed in Mueller's investigation, called the Moscow project a "deal that didn't happen" mostly because he was busy running for president, but defended its propriety.
"Now here's the thing. Even if he was right, it doesn't matter because I was allowed to do whatever I wanted during the campaign. I was running my business, a lot of different things during the campaign," Trump added.
"Everybody knows about this deal. I wasn't trying to hide anything," Trump added.
Cohen said that in his statement to Congress he claimed to have had limited contact with Trump concerning the project, when in fact it had been "more extensive." Cohen also said he falsely told Congress he never took any steps toward traveling to Russia when in fact he had discussed going there, though he never did.
"I made these misstatements to be consistent with individual 1's political messaging and out of loyalty to individual 1," Cohen, who previously identified individual 1 as Trump, said in court.
Asked whether there was anything in the answers to questions from Mueller that Trump submitted that contradicts Cohen on the Moscow project, Trump's lawyer Rudy Giuliani told Reuters in a text message: "Not that I know of."
In August, Cohen pleaded guilty to eight criminal charges, including tax evasion, bank fraud and campaign finance violations, in a case brought by federal prosecutors in New York. His sentencing is scheduled for Dec. 12.
Trump has called Mueller's investigation, which has cast a cloud over his presidency, a witch hunt. Mueller also is looking into whether Trump has sought to unlawfully obstruct the probe.
The president and his allies have escalated their attacks on Mueller in recent weeks. Trump also appointed a political loyalist, Matthew Whitaker, as acting attorney general with oversight of Mueller's investigation, and said he would not intervene if Whitaker moved to curtail the probe.
The proposed Moscow project also involved Felix Sater, a Russian-born property developer and former business associate of Trump. "I brought the opportunity to him and I only dealt with Michael on it," Sater told Reuters in an interview in April.
Dmitry Peskov, Putin's spokesman, said in August 2017 he had received an email in January 2016 from Cohen about a Moscow real estate project, but neither replied nor discussed it with Putin. Peskov said Cohen wrote about "a certain Russian company and certain people" who wanted to build a skyscraper in Moscow and wanted his help in making the stalled project a reality.
Mueller, who took over the Russia investigation from the FBI in May 2017, has secured guilty pleas from several former Trump aides and associates, including former campaign chairman Paul Manafort and former national security adviser Michael Flynn, and also has charged a series of Russian individuals and entities.
Cohen has previously said he would "take a bullet" for the president.
Trump has sought to distance himself from Cohen despite their long association, describing him as "a PR person who did small legal work." Cohen testified in August Trump had directed him to commit a crime by arranging payments to silence two women, adult-film star Stormy Daniels and former Playboy model Karen McDougal, who said before the 2016 election that they had affairs with Trump.
Asked by reporters if she was concerned about Cohen's plea, top House of Representatives Democrat Nancy Pelosi said, "Of course. He lied to the American people."
Mueller's team said on Monday Manafort had breached his plea deal by lying to federal investigators. Trump said on Wednesday he had not ruled out granting a pardon to Manafort, who has pleaded guilty to a range of federal charges from money laundering to unregistered lobbying.
Joshua Dressler, an Ohio State University law professor, noted that Cohen's plea came after Trump submitted his written responses to Mueller.
"If Trump was asked anything relating to the matters about which Cohen has now admitted he lied, then the president could be found to have lied to the special prosecutor, which is a crime and impeachable offense," Dressler said.
Cohen's lawyer, Lanny Davis, noted that Trump called his client a liar. "Who do you believe?" Davis asked on Twitter.
