US Secretary of State Condoleezza Rice has said the UN cannot "survive as a vital force" if it does not reform.
Ms Rice's comments were highly critical
Ms Rice told journalists in the US that everyone recognised that some things in the UN needed to be fixed.
She said John Bolton, a long-time critic of the UN and nominated as the next US ambassador to the body, would help update, reform and strengthen it.
Her comments come as the UN is embroiled in a scandal over corruption in its oil-for-food programme for Iraq.
It has also been dogged by accusations of sexual abuse committed by UN peacekeepers in Africa.
UN Secretary-General Kofi Annan has accepted that change is urgently needed, and has proposed a series of sweeping reforms.
'Not so great'
Speaking to the American Society of Newspaper Editors in Washington, Ms Rice said: "As important an institution as it is, one has to say that there are some things that are not so great about the United Nations right now.
"Everybody recognises that, and we've got to fix it.
"It is no secret to anyone that the United Nations cannot survive as a vital force in international politics if it does not reform."
Ms Rice said Mr Bolton, who has pledged to work to improve UN accountability and has complained of overlapping programmes and mandates, was needed to help update and reform the organisation.
Mr Bolton has said that the UN needs US leadership to get it back on track, and that it should focus more on human rights violations and international terrorism.
Ms Rice's remarks were one of the sharpest attacks to date on the UN by a senior member of the Bush administration, says the BBC's Michael Voss in New York.
Iraq made billions of dollars from illegal oil sales and bribes
Relations between Washington and Mr Annan have been strained since the UN Security Council failed to back the US-led war in Iraq, and more recently over revelations about corruption in the oil-for-food programme.
The $60bn (£32bn) programme allowed Saddam Hussein's Iraq to sell oil in order to buy civilian goods and ease the impact of UN sanctions imposed after Iraq's 1990 invasion of Kuwait.
US Senate investigators have alleged that the Iraqi regime received some $4bn (£2.13bn) in illegal payments from oil companies involved in the programme.
Another $14bn (£7.5bn) allegedly came from "sanctions-busting" - the illegal sale of oil to neighbouring states such as Jordan and Turkey.
Tensions were further heightened on Friday after the secretary-general suggested that the US and Britain may have closed their eyes to the oil smuggling.
Washington and London both deny any impropriety.