During his first state visit since being appointed to office, Tillerson described past U.S. engagement with North Korea as a "failure," The New York Times reported.
"Diplomatic and other efforts of the past 20 years to bring North Korea to a point of denuclearization have failed," Tillerson said, stressing the United States supplied $1.35 billion in financial support to Pyongyang.
Tillerson also said the Trump administration may be interested in a "new approach" as he continues his trip to Seoul, then Beijing.
In his statement to reporters in Japan, Tillerson emphasized the issue of "spending," adding State Department expenditures are "simply not sustainable."
The top U.S. diplomat also said he hopes to expand cooperation with U.S. allies Japan and South Korea, but remained silent when asked about details of his new approach.
"North Korea and its people need not fear the United States or their neighbors in the region who seek only to live in peace with North Korea," he said.
Together with Japanese Foreign Minister Fumio Kishida, Tillerson agreed North Korea should refrain from provocative actions and abide by United Nations Security Council sanctions resolutions.
Tillerson also said the United States supports joint Japan-South Korea efforts to resolve historical issues between the two countries and said he would ask China to play a greater role in resolving the North Korea nuclear issue, Yonhap news agency reported.