The 28 members of NATO have responded to Russia's intervention in Ukraine with "resolve," Hagel said on Friday, "but over the long term, we should expect Russia to test our alliance's purpose, stamina and commitment." (Agencies)
Russia's annexation of Crimea and its backing of separatists in eastern Ukraine "has reminded NATO of its founding purpose," he said.
After the Cold War, the alliance had looked to forge a partnership with its old adversary.
But after Moscow's moves in Ukraine, "NATO must stand ready to revisit the basic principles underlying its relationship with Russia," he said.
Hagel's press secretary, Rear Admiral John Kirby, declined to describe Russia as an "enemy" of the United States.
NATO's deputy secretary general, US diplomat Alexander Vershbow, however said Thursday that Moscow had be to seen as "more of an adversary than a partner."
In his speech, Hagel told an audience at the Wilson Centre think tank in Washington that the alliance faced a crucial choice in light of Russia's assertive stance in Ukraine -- to stand firm or to retreat.
"Future generations will note whether... at this moment of challenge, we summoned the will to invest in our alliance," he warned.
"We must not squander this opportunity or shrink from this challenge. We will be judged harshly by history... if we do."
Hagel issued an appeal for NATO allies to spend more on their armies but stopped short of calling for more dramatic steps.
The Pentagon chief did not urge an expansion of US military presence on the continent, nor did he warn of any permanent deployment of alliance troops in NATO states in Eastern Europe.
Senior US officials and commanders have voiced concern for years that European partners are failing to make necessary investments in defence and allowing their military power to erode.
The 28 members of NATO have responded to Russia's intervention in Ukraine with "resolve," Hagel said on Friday, "but over the long term, we should expect Russia to test our alliance's purpose, stamina and commitment."