Trump has for months raised questions about the money the United States pours into NATO, which he says needs to be reconfigured to take account of today's threats.
"I like the idea of using NATO and also neighbors that aren't in NATO and take them out. You gotta take them out," Trump said.
Under President Barack Obama, the United States has relied heavily on US airstrikes to attack Daesh targets in Syria and Iraq. Republicans have criticized this policy as not enough to stop the terrorists.
Trump said the idea of using the Cold War-era alliance would be to ease the load on American forces.
"I don't want to get too much of ours involved. I want NATO to be involved," Trump said. "We spend a tremendous amount of money on NATO. We take care of countries that frankly should be taking care of themselves in terms of economically."
Trump's comments came amid an uproar over a meeting between former President Bill Clinton and Attorney General Loretta Lynch at a time when Clinton's wife, Democratic presidential candidate Hillary Clinton, is under federal investigation, Reuters reported.
The private meeting took place on Lynch's plane after she landed in Phoenix Monday night and Bill Clinton was leaving the airport after a rally he held for his wife earlier that day.
Hillary Clinton is under an FBI investigation for her use of a private email server when she was Barack Obama's first-term secretary of state.
Trump said that the meeting was proof of his charge that the US political system is "rigged" in favor of political elites.
"It's unheard of," Trump said. "You have this massive investigation on emails and they'd have a meeting like this."