Hurricanes Katrina, Rita and Wilma, which battered Gulf Coast states over an eight-week period, stretched the agency "beyond the breaking point," Chertoff said in a public review of his department's 2005 performance.
"We will retool FEMA, maybe even radically, to increase our ability to deal with catastrophic events," he said in a 35-minute speech at George Washington University.
Chertoff offered no specifics for changing the Federal Emergency Management Agency but said FEMA employees must be given authority to cut through bureaucracy to assist disaster victims quickly.
His aides said changes will come early next year.
It was unclear whether any of the changes will require legislative action, or if Chertoff will move before Congress returns to Washington in late January. A special House inquiry of the government's response to Katrina, chaired by Rep. Tom Davis, R-Va., is expected to issue its findings by Feb. 15.
Additionally, the White House is completing its own review of federal preparations and response to Katrina, an extraordinarily powerful storm that hit Aug. 29. White House spokeswoman Dana Perino said that "certainly, some of the recommendations will be related to FEMA."
Homeland Security and FEMA were widely blamed for the government's sluggish response to Katrina, which left some victims without food, water and safe shelter for days. The criticism led to the resignation of FEMA Director Michael Brown, who had limited disaster response experience.