Addressing the ruling Justice and Development (AK) Party members in the eastern province of Agri, Erdogan said the terrorist group was being used as a "pawn" by some states and powers and would be disposed of eventually.
"Do you believe that YPG/PYD in Syria is working for the benefit and future of our Kurdish brothers?" Erdogan asked. "Never. This is not the case."
He said he always spoke out against the abuse of Kurdish people's rights by Bashar al-Assad's regime.
"I asked him, back in the days when we were on good terms, why they did not give them [Kurds] identity cards or passports. But Assad never cared about them."
Erdogan said that Daesh in Syria equaled "YPG/PYD".
"Whoever established Daesh and armed them, and wreaked carnage in the country [Syria], is now arming and controlling and guiding YPG/PYD," he said, in an indirect reference to the U.S.
For the Syrian people, their "only friend" is Turkey, he added.
Erdogan later attended another party meeting in the neighboring Mus province, where he warned businessmen against moving their assets abroad, calling it a "treacherous" attempt.
"I am getting some news that some businessmen are trying to move their assets abroad. I am calling on the Cabinet to never allow such a move. Because this is treason," Erdogan said without giving any names or other details.
He added that Turkey was a strong country that could take the necessary stand to protect its independence and national interests, no matter the circumstances.
Last Tuesday, Turkey’s National Security Council termed the PKK/PYD terror group’s ethnic cleansing in Syria "unacceptable".
The council met under the leadership of Erdogan in capital Ankara.
"PKK/PYD/YPG terrorist organization’s efforts to carry out a covert ethnic cleansing by changing the demographic structure of Syria is against international law and human rights, and, therefore, it is unacceptable," said a statement released after the meeting.
Turkey will continue to take every necessary measure at the Turkey-Syria border area to ensure its own security, the council said.
The PKK/PYD is the Syrian branch of the PKK terrorist network, which has waged war against Turkey for more than 30 years. Turkey considers PKK, PYD, and YPG all one and the same.
While recognizing the PKK as a terrorist group, the U.S. has treated the PKK/PYD/YPG as an ally in its anti-Daesh efforts, despite its PKK ties documented by Turkey.
Since the PKK launched its terror campaign in Turkey in 1984, tens of thousands of people have been killed.