Manafort sued Mueller on Jan. 3, saying his office's investigation into possible collusion between the Trump campaign and Russia in the 2016 presidential election exceeded its legal authority.
The civil lawsuit, filed in U.S. District Court for the District of Columbia, accused Deputy Attorney General Rod Rosenstein, who appointed Mueller, of exceeding his legal authority to "grant Mr. Mueller carte blanche to investigate and pursue criminal charges in connection with anything he stumbles across."
"These claims lack merit," a Justice Department filing to the court on Friday said. "The Special Counsel's investigation and prosecutions are entirely lawful."
The department said the case should be dismissed.
Mueller's office indicted Manafort and his business partner Rick Gates in October on charges including conspiracy to launder money, conspiracy against the United States and failing to register as foreign agents of Ukraine's former pro-Russian government.
Trump and his Republican allies in Congress on Friday escalated a campaign against U.S. law enforcement agencies over their probe of the president's ties to Russia, releasing a disputed memo that the Federal Bureau of Investigation warned was misleading and inaccurate.
Democrats said the four-page memo mischaracterized highly sensitive classified information and was intended to undermine Mueller's criminal probe into the Russia matter launched in May 2017 that grew out of an earlier FBI investigation. They warned Trump against using it as a pretext to fire Rosenstein or Mueller himself.
(Reporting by David Brunnstrom; Additional reporting by Nathan Layne and Sarah N. Lynch; Editing by Lisa Von Ahn)