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McMaster said that the communist nation has become "the greatest immediate threat to the United States".
While addressing the audience at the Reagan National Defense Forum in California, he said: "I think it's increasing every day, which means that we are in a race, really, we are in a race to be able to solve this problem," reported CNN.
McMaster made the statement after he was asked if the chance of war had increased with North Korea after the country launched an intercontinental ballistic missile.
He, however, assured that President Donald Trump is committed to the complete denuclearization of the Korean Peninsula.
"With every missile launch or nuclear test, Kim has improved his country's capabilities," CNN quoted McMaster as saying.
The national security adviser said: "Kim was extremely unlikely to change his behavior without some significant new actions in the form of much more severe sanctions" and "complete enforcement of the sanctions that are in place," it reported.
McMaster said that North Korea's missile launch had strengthened United States relation with Japan and South Korea.