The new suit comes less than two months after dozens of US states accused Facebook and Instagram owner Meta of profiting "from children's pain," damaging their mental health and misleading people about the safety of its platforms.
In total more than 40 states are suing Meta, though some opted to file in local courts rather than join in the federal case.
"Our investigation into Meta's social media platforms demonstrates that they are not safe spaces for children but rather prime locations for predators to trade child pornography and solicit minors for sex," New Mexico attorney general Raul Torrez said in a statement.
Children can easily evade Facebook and Instagram age constraints by lying about how old they are, the suit charged, detailing examples.
Once on the social networks, children are targeted by Meta software that not only strives to keep them engaged but directs inappropriate material their way, according to the filing.
"Facebook and Instagram are a breeding ground for predators who target children for human trafficking, the distribution of sexual images, grooming, and solicitation," the suit argued.
The complaint cited the example of a 12-year-old who opened a Facebook account by giving a bogus birthdate and was quickly recommended content related to masturbation, nudity, bondage and fetishism.
"Child exploitation is a horrific crime and online predators are determined criminals," a Meta spokesperson said in response to an AFP inquiry.
Meta's fight against predators includes using sophisticated technology, employing child safety experts, reporting content to the National Center for Missing and Exploited Children, and sharing information with other companies and law enforcement agencies, the spokesperson added.
Meta disabled more than 500,000 accounts in August alone for violating its child safety policies, according to a task force at the company dedicated to the effort.
Child victims of abuse online are a hot-button issue for regulators and tech companies are eager to show they are taking adequate measures to protect kids and teens.
Big tech companies, including Meta and Google, said last month they would team up in a new program to fight online child sexual abuse or exploitation.
In the new program, called Lantern, companies will share signs of activity that violate their policies on child exploitation so that platforms can move more quickly to detect, take down and report problematic content.
The announcement of Lantern came on the same day that a former Meta senior engineer told a Senate hearing in Washington that top executives, including Mark Zuckerberg, ignored his warnings that teens were unsafe on the company's platforms.
Zuckerberg is named as a defendant in the suit filed by New Mexico.
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