The intelligence failures were deeper than first thought, Mr Obama said as he demanded action after meeting US intelligence chiefs and top national security aides.
“It is increasingly clear that intelligence was not fully analysed or fully leveraged,” Mr Obama said in a terse televised statement after the meeting at the White House.
“That's not acceptable, and I will not tolerate it.”
Mr Obama said two investigations into the botched plot to blow up a Northwest plane showed US intelligence missed other “red flags” as well as the already revealed fact that the top suspect was an extremist who had traveled to Yemen.
He said US intelligence knew that Al-Qa'ida in the Arabian Peninsula wanted to strike not only US targets in Yemen but in the United States itself.
“In other words, this was not a failure to collect intelligence, it was a failure to integrate and understand the intelligence that we already had.
“When a suspected terrorist is able to board a plane with explosives on Christmas Day, the system has failed in a potentially disastrous way.
“It's my responsibility to find out why, and to correct that failure so that we can prevent such attacks in the future.”