"I retired from military service three months after sequestration took effect," Mattis told the House Armed Services Committee, referring to the budgetary limits.
"Four years later, I returned to the Department (of Defense), and I have been shocked by what I've seen about our readiness to fight," he added.
"No enemy in the field has done more to harm the readiness of our military than sequestration."
Mattis was addressing lawmakers seeking additional information about President Donald Trump's proposed 2018 budget.
Trump has called for a significant jump in the Pentagon's vast budget, though it falls short of the historic spending bonanza sought by more hawkish Republicans.
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The Pentagon has called for $574 billion in general defense funding, with an additional $65 billion for supplemental wartime spending -- for a total of $639 billion.
The proposed spending boost represents a more than $50 billion increase -- about 10 percent -- over 2017 funding levels for the base budget, though it amounts to only about three percent over projections envisioned by the Obama administration.
Committee Chairman Congressman Mac Thornberry and other Republicans say the increase is insufficient to strengthen the US military.
"2018 is a key decision point," Thornberry said.
"We have spent six years just getting by, asking more and more of those who serve, and putting off the choices that have to be made. We cannot keep piling missions on our service members without ensuring they have all they need to succeed."
Many Democrats on the committee agree, but worry about where the money will come from, given the Trump administration's pressure to cut taxes.
