"This will be a real review. It will be designed to ensure that NATO is moving fast and irreversibly toward Europe leading, stepping up to take primary responsibility for the defence of Europe," he told his NATO counterparts in Brussels on Thursday.
Hegseth lambasted European allies for failing to provide US forces access to bases in Europe to launch attacks on Iran, calling it "shameful".
"These allies, they put America's sons and daughters, our sons and daughters, at risk by denying them the predictable access, basing and overflight that never should have been in question at all," he said.
Hegseth said earlier that America's allies in Europe must take the lead on the defence of their own continent and help turn NATO into "a read hardline military alliance".
At the meeting of NATO defence ministers, Hegseth called for a reboot of the 32-nation organisation to turn it into a "NATO 3.0" capable of deterring any threat.
His remarks came a few weeks after the United States told its allies that it would no longer supply certain warships and aircraft if one of them came under attack.
European allies and Canada are trying to work out how to plug the gaps.
"NATO 3.0 is post-Cold War recognition that (NATO) needs to go back to a real hardline military alliance that has real military capabilities capable of deterring right here on the continent and taking the lead for the conventional defence of Europe," Hegseth said.
As part of that, he told reporters, the United States would be investing $US1.5 trillion ($A2.1 trillion) in its own defence in 2027, sending "a message to the world" that America is building an "arsenal of freedom".
Hegseth said this arsenal "first and foremost protects America and American interests but also backstops the strength of NATO and our allies".
He said he would tell US allies they "have to be willing to stand up and do something in a strong way about" the defence of their own continent.
NATO's supreme allied commander, an American, is working on back-up plans to defend Europe after the US signalled on June 3 that it would no longer supply an aircraft carrier and support ships, aerial refuelling planes and dozens of fighter jets, among other military assets, in a crisis.
The Trump administration insists that it needs to be able to plan for two simultaneous conflicts and wants more military resources at hand should a conflict break out with China in the Indo-Pacific region.
Under NATO's collective security guarantee - Article 5 of its founding treaty - the 32 allies pledge that an attack on one of them will be considered an attack on all.
It does not oblige them to provide military support, although many likely would.
In essence, the United States is scaling back how it might help should an ally trigger Article 5.
The US has by far NATO's biggest armed forces.
It does not intend to withdraw its nuclear weapons in Europe, which are key to NATO's deterrence.
