Trump, while speaking at a campaign stop in Biloxi, Mississippi, offered no evidence for his claim in which he also said that escalating tensions between Iran and Saudi Arabia were signs that the Islamic Republic wanted to take over the longtime US ally in the Middle East.
"They've created ISIS. Hillary Clinton created ISIS with Obama," Trump said yesterday.
He couched his remark in a brief discussion of the Iranian protests outside the Saudi embassy in Tehran, which erupted after Saudi Arabia executed 47 people, including a dissident Shiite cleric.
"In Tehran, they're burning down the Saudi embassy, you see that?" Trump was quoted as saying by CNN.
"Now, what that is...Iran wants to take over Saudi Arabia. They always have. They want the oil, OK? They've always wanted that."
Trump has blamed both Democrats and former President George W Bush when talking about unrest in the Middle East, particularly citing Bush's decision to invade Iraq in 2003.
In the recent weeks, he has been particularly aggressive in going after Clinton, the Democratic presidential front-runner, and her record leading the State Department.
Two of Trump's 2016 competitors, Carly Fiorina and Rick Santorum, said in November that Clinton and Obama were to blame for the rise of Islamic State in Iraq and Syria (ISIS).
Trump and Clinton have been involved in a war of words in recent weeks. Clinton had slammed Trump's recent comments about banning Muslim immigrants, saying the Republican front-runner was "becoming ISIS's best recruiter".
"He is becoming ISIS's best recruiter. They are going to people showing videos of Trump insulting Islam and Muslims in order to recruit more radical jihadists," she had said.
Trump dismissed Clinton's assertion that the Islamic State was using his videos as a recruitment tool saying she is "a liar" and "made up" the claim.