Although Armstrong has not been charged with any offences and has repeatedly denied ever cheating, USADA told the American they had forwarded their allegations to the Anti-Doping Review Board, which would decide whether to proceed with the case.
"This formal notice letter is the first step in the multi-step legal process for alleged sport anti-doping rule violations," USADA said.
"As in every USADA case, all named individuals are presumed innocent of the allegations unless and until proven otherwise through the established legal process.
"If a hearing is ultimately held then it is an independent panel of arbitrators, not USADA that determines whether or not these individuals have committed anti-doping rule violations as alleged."
Five of Armstrong's associates, three doctors and two team officials, were also told that procedures had begun against them in what could be one of the biggest doping cases in sports.
Armstrong, who has never failed a doping test, denied the charges.
"I have never doped, and, unlike many of my accusers, I have competed as an endurance athlete for 25 years with no spike in performance, passed more than 500 drug tests and never failed one," he said in a statement.
USADA sent Armstrong and his associates a 15-page letter outlining the accusations against them between 1998 and 2011 that was later circulated among media organisations.
The allegations included prolonged use of a range of performance-enhancing drugs including erythropoietin (EPO), blood transfusions, testosterone, corticosteroids, human growth hormone and masking agents.
The Texan was also accused of trafficking and administering drugs to other cyclists as well as conspiring with team manager Johan Bruyneel, doctor Pedro Celaya, doctor Luis del Moral, doctor Michele Ferrari and trainer Jose Pepe Marti.
Armstrong is one of the most successful and controversial cyclists of all time. A cancer survivor, he returned to the sport after beating the illness and won the Tour de France an unprecedented seven times in succession from 1999 to 2005.
Although he never failed a doping test, he was dogged by accusations of cheating and foul play.
The US Justice Department spent two years investigating the claims against him but closed their case in February without laying any charges against him.
Armstrong said USADA's accusations were the same as the Justice Department's.
"These charges are baseless, motivated by spite and advanced through testimony bought and paid for by promises of anonymity and immunity," he said.
"Although USADA alleges a wide-ranging conspiracy extended over more than 16 years, I am the only athlete it has chosen to charge.
"USADA's malice, its methods, its star-chamber practices, and its decision to punish first and adjudicate later all are at odds with our ideals of fairness and fair play."
USADA said they "numerous riders, team personnel and others" had provided statements that Armstrong used drugs and would be prepared to testify against him. They did not identify any other witnesses.
USADA also said they had evidence that Armstrong tested positive for EPO during the 2001 Tour of Switzerland but the results were covered up.
Cycling's world governing body, the UCI, had previously denied any knowledge of a cover up when those same allegations were first made.
USADA also said blood samples taken from Armstrong in 2009 and 2010 indicated the use of EPO and/or blood transfusions.
If found guilty, Armstrong could face a life ban from competing, USADA said, although Armstrong himself said he could also be stripped of his seven Tour de France titles.
The 40-year-old Texan retired from cycling earlier this year but has taken up triathlon and had planned to compete in a race in France in two weeks.
The UCI said it had been informed of USADA's decision to commence proceedings but was not involved in the case.
"This is the first time USADA has communicated to UCI on this subject," cycling's governing body said a statement.
"The UCI is not aware of the information that is available to USADA on the persons concerned and has not been involved in the proceedings opened by USADA."