Wal-Mart Stores Inc. is cutting prices on thousands of products in an aggressive campaign to reinforce its reputation as a discount leader, as the company seeks to reverse months of slowing U.S. sales.

The world's largest retailer was a rare beneficiary of the economic downturn, as large numbers of bargain-hungry Americans, including many middle-class families, flocked to its supercenters from supermarkets and specialty clothing stores.

Wal-Mart's...