"I would like to pause to acknowledge the shame which we have all felt as a result of the sexual abuse of minors by some clergy and religious in this country," Benedict said during an address at a Mass in Sydney.
"I am deeply sorry for the pain and suffering the victims have endured. I assure them as their pastor that I too share in their suffering," he said.
"Those responsible for these evils must be brought to justice."
Support groups for victims of church abuse in Australia, whose numbers are not known but who activists say are in the thousands, said a papal apology is not enough and demanded the church end what they say is a continuing cover-up of the scale of the problem and stop fighting compensation claims lodged in civil courts.
"Sorry is not enough. Victims want action, not just words," the Broken Rites group said in a statement posted Saturday on its Web site.
There was no immediate word whether Benedict would meet with victims of clergy abuse, as he did during his trip to the United States in April, when he also expressed his shame for the scandal.
Benedict spoke of the scandal several times during the April journey, saying that the issue had caused "so much suffering" for the American church. During that trip he also met with a small group of victims from the Boston Archdiocese, where the scandal boiled over in 2002. It was believed to be the first time a pope had met with victims of clerical sex abuse.
The pontiff is in Australia to lead hundreds of thousands of pilgrims in the church's World Youth Day, a global celebration meant to inspire a new generation of Catholics.
During his appearances in Australia, Benedict has spoken about the need to strengthen traditional Christian values including charity and chastity, and decried the selfishness and greed of today's "cult of material possessions."
In his remarks Saturday, the pope said the scandal of clergy sexual abuse had badly damaged the church.
"These misdeeds, which constitute so grave a betrayal of trust, deserve unequivocal condemnation," he said. "They have caused great pain, they have damaged the church's witness."
Benedict will join tens of thousands of young Catholics for a couple of hours later Saturday at an open-air vigil held at a horse race track in Sydney. He will lead a Mass on Sunday before an estimated crowd exceeding 200,000 that will mark the culmination of the World Youth Day festival.
On Friday, Benedict told representatives of Islam and other faiths that they must unite to combat religion's role in "sinister and indiscriminate" violence.
Without mentioning terrorism directly, the pontiff said there were those in who were using religion "as a cause of division rather than a force for unity" in a 40-minute exchange with Australian Jewish, Muslim, Hindu and Buddhist leaders in Sydney.
"In a world threatened by sinister and indiscriminate forms of violence, the unified voice of religious people urges nations and communities to resolve conflicts through peaceful means and with full regard for human dignity," Benedict told the leaders.
The remarks come as the Vatican tries to cool lingering anger among Muslims over a speech Benedict gave in 2006 that appeared to associate Islam with violence. Benedict quickly apologized for the link.
Benedict, who last week said his church was in "crisis" in the West because many had lost faith in God, held a separate meeting with deputies of Christian denominations. He urged them to cooperate against secularism and apathy.
"I think you would agree that the ecumenical movement has reached a critical juncture," he told the Christian representatives. "We must guard against any temptation to view doctrine as divisive."
The pope also blessed the opening scene of a live reenactment of the stations of the cross - the Bible's depiction of Christ's last days - that was played out through Sydney, with some of the city's most recognizable landmarks in the backdrop.
Pilgrims lined the streets to watch the recreation, which stretched over three hours and included often stark scenes of brutality toward Jesus, including his being nailed to a cross. Organizers estimated the live television audience for one of the festival's most dramatic events topped 500 million.