Craigslist has also agreed to sue 14 software and Internet companies that help people who post erotic service ads to circumvent the Web site's defenses against inappropriate content and illegal activity.
Craigslist will also begin using new search technology in an effort to help authorities find missing children and victims of human trafficking.
Police across the country have been arresting people for using Web sites like Craigslist to advertise the sexual services of women and children.
"The dark side of the Internet must be stopped from eclipsing its immense potential for good," Blumenthal said in a statement Thursday. "We'll continue to fight illicit and illegal activity on the Internet, especially threatening the safety and well-being of children."
The agreement between the states and Craigslist was joined by the National Center for Missing and Exploited Children.
"The criminals engaged in the sexual trafficking of children no longer parade them on the streets of America's cities," said NCMEC President and Chief Executive Ernie Allen. "Today, they market them via the Internet."
States that signed the agreement include Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
Washington, D.C., the U.S. Virgin Islands and Guam also joined the agreement.