McMaster made the remarks in Kabul after the U.S. military announced that North Korea had failed in another attempt to test a missile early on April 16.
The U.S. Pacific Command said it detected the failed missile launch just hours before U.S. Vice President Mike Pence landed in Seoul on an official visit to South Korea.
It said the missile "blew up almost immediately" after the attempted launch.
McMaster said North Korea's missile test fits a pattern of provocative, destabilizing, and threatening behavior, and that U.S. President Donald Trump will not allow North Korea to put the United States or its regional allies under threat.
He said the consensus, including China, is "that this problem is coming to a head. And so it's time for us to undertake all actions we can, short of a military option, to try to resolve this peacefully."
McMaster called North Korea a "hostile regime," and said North Korea's leader Kim Jong Un was "unpredictable" and had "demonstrated his brutality."
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He said that Washington was working together with its allies in the region and with China's leadership to develop a range of possible responses, adding that all options were on the table.
The U.S. announcement confirmed earlier reports by the South Korean officials of the failed missile test.
"North Korea attempted to test an unidentified type of missile from Sinpo area in the South Hamkyong Province this morning, but we suspect the launch has failed," South Korea's Defense Ministry said in a statement.
South Korea's Yonhap news agency, citing an unidentified South Korean intelligence source, said the missile did not appear to have flown far from its launch site before exploding.
The attempted launch came a day after North Korea rolled out intercontinental ballistic missiles and other military hardware at a public parade and vowed that it was "ready to hit back with nuclear attacks" against its enemies.
It took place amid concerns that North Korea may be preparing for its sixth nuclear weapons test or a significant rocket launch, such as its first flight test of an intercontinental ballistic missile.
The failed launch occurred just before U.S. Vice President Mike Pence arrived in Seoul at the start of a 10-day trip to the Asia-Pacific region amid increasing tensions in North Korea over its nuclear and missile programs.
Pence told U.S. soldiers at an Easter dinner on April 16 that the "provocation from the North" was "just the latest reminder of the risks each one of you face each and every day in the defense of the freedom of the people of South Korea and the defense of America in this part of the world."
Amid the elevated tensions, the United States has dispatched what Trump called an "armada" of ships -- including an aircraft carrier -- into waters off the Korean Peninsula.
North Korea launched a long-range rocket and conducted two nuclear tests in 2016. Its stated goal is to develop a long-range nuclear missile capable of reaching the continental United States.
A previous missile test from Sinpo failed earlier in April, sending the projectile spinning out of control and plunging into the sea.
Analysts say North Korean missile and nuclear tests have three main goals -- develop the technologies, bolster the domestic image of Kim, and apply political pressure on Seoul and Washington.
North and South Korea are technically still at war after their 1950-53 conflict ended without an official peace treaty. The U.S. military has about 28,500 troops stationed in South Korea.