And he warned that the current effort to protect civilians in Libya, as mandated by the United Nations, was under threat as the alliance faced running out of bombs after just 11 weeks.
America, he added, may soon consider the North Atlantic Treaty Organisation as not worth its continued support.
In his final policy speech as Pentagon chief, Mr Gates yesterday questioned Nato's viability, saying members' penny-pinching and lack of political will could hasten a US pullout.
Mr Gates said: "The blunt reality is that there will be dwindling appetite and patience in the US Congress - and in the American body politic writ large - to expend precious funds on behalf of nations apparently unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defence,"
In a speech at the Security and Defence Agenda, a Brussels policy centre, Mr Gates complained of what he called a "two-tiered" membership structure, "between those willing and able to pay the price and bear the burdens of commitments, and those who enjoy the benefits of Nato membership but don't want to share the risks and the costs."
He added that some Nato partners were "apparently willing and eager for American taxpayers to assume the growing security burden left by reductions in European defence budgets."
He criticised Nato nations for failing to meet commitments in Afghanistan. Despite signs of real progress there, the mission has been weakened by "the inability of many allies to meet agreed-upon commitments". The war effort also has been hobbled by "national 'caveats' that tied the hands of allied commanders in sometimes infuriating ways," he added.
And despite Nato's decision to take command of the air war in Libya, the operation would fall apart without a large infusion of US support, he said, since other Nato nations have not invested in the weapons required to carry out lengthy combat operations.
He said: "The mightiest military alliance in history is only 11 weeks into an operation against a poorly armed regime in a sparsely populated country - yet many allies are beginning to run short of munitions, requiring the US, once more, to make up the difference."
While the Libya war was unanimously endorsed by Nato nations, less than half are participating, and less than a third are carrying out strike missions. He said: "Frankly, many of those allies sitting on the sidelines do so not because they do not want to participate, but simply because they can't. The military capabilities simply aren't there." The Libya operation has proven the alliance is desperately short of intelligence, surveillance and reconnaissance aircraft, as well as aerial refuelling planes. The US is still supplying the largest share of all of those to the Nato effort, even though it pulled most of its strike aircraft out of the operation.
Not all his complaints were new. Last year he warned of the dangers of the "demilitarisation of Europe". The US would like to see Europe spend more on shared commitments. Mr Gates added: "Future US political leaders - those for whom the Cold War was not the formative experience that it was for me - may not consider the return on America's investment in Nato worth the cost."
Mr Gates, CIA director from 1991 to 1993, retires on 30 June after nearly five years as Pentagon chief. Nato formed in 1949 as a bulwark against the Soviets, but post-Cold War has struggled to find a purpose, even as it has expanded to 28 full members.