Washington's police chief said Trump's move would threaten law and order by upending the command structure.
"In my nearly three decades in law enforcement, I have never seen a single government action that would cause a greater threat to law and order than this dangerous directive," Chief Pamela Smith said in a court filing.
The legal battle playing out on Friday showed the escalating tensions in a mostly Democratic city that now has its police department under the control of the Republican presidential administration.
Trump's takeover of the police department is historic, yet it had played out with a slow ramp-up in federal law enforcement officials and National Guard troops to start the week.
As the weekend approached, though, signs across the city — from the streets to the legal system — suggested a deepening crisis over who controls the city's immigration and policing policies, the district's right to govern itself and daily life for the millions of people who live and work in the metro area.
Washington's top legal official was pushing in court to reverse the order putting the head of the Drug Enforcement Administration in charge of police in the nation's capital.
District of Columbia Attorney General Brian Schwalb argues the police takeover is illegal and threatens to "wreak operational havoc".
The lawsuit comes after US Attorney General Pam Bondi said on Thursday that Drug Enforcement Administration boss Terry Cole will assume the police chief's duties and approval authority for any orders issued to officers.
It was unclear where the move left the city's current police chief, Smith, who works for the mayor.
Schwalb argues the new order goes beyond Trump's authority and implementing it would "sow chaos" in the Metropolitan Police Department.
"The administration's unlawful actions are an affront to the dignity and autonomy of the 700,000 Americans who call DC home," Schwalb said.
The Justice Department declined to comment on the district's lawsuit, and a White House spokesperson did not immediately respond to messages seeking comment.
At a Friday afternoon hearing for Schwalb's request for a temporary restraining order, US District Judge Ana Reyes seemed sceptical of Bondi's authority to sideline Smith.
"I don't see any basis in the statute for her to order the Metropolitan Police Department to act," said Reyes, nominated to the bench by Democratic President Joe Biden.
The police takeover is the latest move by Trump to test the limits of his legal authority to carry out his agenda, relying on obscure statutes and a supposed state of emergency to bolster his tough-on-crime message and his plans to speed up the mass deportation of people in the United States illegally.
It also marks one of the most sweeping assertions of federal authority over a local government in modern times.
While Washington has grappled with spikes in violence and visible homelessness, the city's homicide rate ranks below those of several other major US cities, and the capital is not in the throes of the public safety collapse the Trump administration has portrayed.
The president has more power over the nation's capital than other cities, but DC has elected its own mayor and city council since the Home Rule Act was signed in 1973.
