Pope Benedict has called for the Catholic Church to reflect on what allowed the sexual abuse of children by priests to happen.
The number of sexual abuse cases had reached "an unimaginable dimension" in 2010, the Pope said.
He also spoke of the "shame" the abuse crisis had caused the Church.
The abuse scandal, which first surfaced in the US in 2002, erupted globally this year with a raft of allegations across Europe and beyond.
"We have to ask ourselves what was wrong in our preaching, in our entire way of configuring the Christian being, to allow something like that to happen," Pope Benedict told cardinals and bishops gathered for his traditional Christmas audience in Rome.
"We have to take this humiliation as an exhortation for the truth and a call for renewal," he added.
However, the Pope also said the fault lay not only with the Church but also in the "context of our times".
"There exists a market of pornography regarding children that seems to be increasingly accepted as normal by society", he said.
The BBC's David Willey in Rome says thousands of victims of paedophile priests have come forward and bishops have been accused of covering up cases, allowing paedophile priests to continue their ministry.
The Vatican has now introduced fast-track rules for defrocking priests found to have abused children, our correspondent says.