Cameron Douglas, 31, told a judge that a New York contact first asked him if he could score the drugs in 2006. After that, "I began supplying on a regular basis."
Asked by a judge if he knew what he was doing was wrong, he replied, "Yes, your honor."
Prosecutors said Douglas had signed a plea agreement, but the details weren't disclosed.
In addition to conspiracy to distribute drugs, Douglas pleaded guilty to heroin possession - a charge stemming from allegations that his girlfriend tried to smuggle him the drug in an electric toothbrush while he was under house arrest.
He faces a minimum 10-year prison term at sentencing on April 27.
"I think he handled it well under the circumstances," defense attorney Nicholas DeFeis said after his jailed client's plea.
The son of the Oscar-winning actor was arrested July 28, 2009, at the trendy Hotel Gansevoort as part of a Drug Enforcement Administration investigation.
A criminal complaint drawn up by a DEA agent last year said the allegations were based on information provided by three unnamed crystal meth users and dealers. The users - including someone who once worked for Cameron Douglas - had pleaded guilty and agreed to cooperate with the investigation.
Investigators say Douglas was paid tens of thousands of dollars for trafficking methamphetamine - what he referred to in intercepted phone calls as "pastry" or "bath salts." Cash and drugs were routinely exchanged from coast to coast through shippers like FedEx, the court papers said.
Cameron Douglas has acted in movies including 2003's "It Runs in the Family," starring his father and grandfather Kirk Douglas.
He also was arrested in California in 2007 on cocaine possession charges. His attorney then said the arresting officer didn't do his job properly.