Gen Stanley McChrystal made his assessment in a copy of a confidential report obtained by the Washington Post.
He recently called for a revised military strategy in Afghanistan, suggesting the current one is failing.
More than 30,000 extra US troops have been sent to Afghanistan since May - almost doubling the US contingent.
The number of US troops in Afghanistan is already set to rise to 68,000 by the end of the year.
Stark concerns have previously been expressed about the viability of the military mission in Afghanistan, but the BBC's Paul Reynolds says what is new about the general's warning is his outright use of the word "failure".
Gen McChrystal, who took over as military commander in May, is expected to make a separate request for tens of thousands of extra forces to be deployed. He also says that training for Afghan forces needs to be speeded up. A senior adviser to Afghan President Hamid Karzai said the government was not against more international troops being sent - but their success would depend on where they were sent.
"Our official stance is that until our security forces are strengthened, both in terms of numbers and quality, there won't be a long-lasting peace in Afghanistan," Sebghatullah Sanjar told the BBC.
US President Barack Obama has recently said the right strategy for Afghanistan will have to be found before any fresh commitment of forces can be considered.
'Mission failure'
In his latest assessment, Gen McChrystal is quoted by the Washington Post newspaper as saying: "Failure to gain the initiative and reverse insurgent momentum in the near-term [next 12 months]... risks an outcome where defeating the insurgency is no longer possible."
He warned that "inadequate resources will likely result in failure".
"Additional resources are required," the general states in the summary of the report.
He said that failure to provide adequate resources "risks a longer conflict, greater casualties, higher overall costs, and ultimately, a critical loss of political support".
"Any of these risks, in turn, are likely to result in mission failure." But Gen McChrystal adds that the increase in troop numbers must come in the context of a revised military strategy in the country.
He has consistently called for a strategy which makes its top priority the protection of the Afghan people.
In the report Gen McChrystal also:
* Provides new details about the sophisticated nature of the Taliban insurgency
* Criticises Nato forces for focusing more on tackling insurgents than protecting Afghan civilians
* Censures the Afghan government for lack of action on widespread corruption
* Warns that Afghanistan's prisons have become a sanctuary for active insurgents
All of these factors, he claims, have led to a "crisis of confidence among Afghans" in the face of a resilient insurgency.
The increase in troop numbers would provide security for the Afghan people and create a space in which good governance can take root, Gen McChrystal argues.
In a blunt evaluation, he says that both the Afghan government and international forces face losing credibility among the Afghan population.
"Pre-occupied with protection of our own forces, we have operated in a manner that distances us - physically and psychologically - from the people we seek to protect," he says.
But 2009 has been the deadliest year for foreign troops in Afghanistan since the fall of the Taliban in 2001.
Italy is holding a day of mourning for six soldiers killed in a Kabul bomb attack last week. And the future of German troops in Afghanistan has become a central issue in Germany's election campaign.
The Washington Post says that the report has been presented to US Defence Secretary Robert Gates.
A recent opinion poll showed that a narrow majority of Americans now oppose the conflict.
Last week the chairman of the Joint Chiefs of Staff Adm Mike Mullen, told the US Senate Armed Services Committee that more troops might be required to tackle the mounting Taliban insurgency.
But President Obama later said there was "no immediate decision pending" on sending more troops to Afghanistan.
"You have to get the strategy right and then make the determination about resources," Mr Obama said.
The BBC's security correspondent Nick Childs says the timing of this leak, and the stark language contained in it, is certain to pile the pressure on the Obama administration, particularly when the president has just said he is not ready to make a final decision.
This is largely because the issue has become so politically charged in Washington, our correspondent says.
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