Guterres said the situation in Myanmar's western state of Rakhine was best described as ethnic cleansing.
"When one-third of the Rohingya population had to flee the country, could you find a better word to describe it?" he told a news conference.
"I call on the Myanmar authorities to suspend military action, end the violence, uphold the rule of law, and recognise the right of return of all those who had to leave the country," said Guterres, adding that he had spoken several times with Myanmar's national leader, Aung San Suu Kyi.
The exodus of refugees, sparked by the security forces' fierce response to a series of Rohingya militant attacks on Aug 25, is the most pressing problem Suu Kyi has faced since becoming leader last year.
United Nations Secretary General Antonio Guterres speaks at a news conference ahead of the 72nd United Nations General Assembly at UN headquarters in New York, September 13, 2017. Reuters
The government says it is targeting "terrorists," while refugees say the offensive aims to push Rohingya out of Myanmar.
The 15-member Security Council met behind closed doors on Wednesday, at the request of Sweden and Britain, to discuss the crisis for the second time since it began and agreed to publicly condemn the situation.
The council "expressed concern about reports of excessive violence during the security operations and called for immediate steps to end the violence in Rakhine, de-escalate the situation, re-establish law and order, ensure the protection of civilians ... and resolve the refugee problem."
British UN Ambassador Matthew Rycroft said it was the first statement from the Security Council on Myanmar in nine years. Such statements have to be agreed by consensus and Russia and China have traditionally protected Myanmar from any action.
Myanmar said last week it was negotiating with Russia and China to ensure they blocked any censure by the Security Council over the violence in Rakhine state.
The United Nations' top human rights official earlier this week denounced Myanmar for conducting a "cruel military operation" against the Rohingya, branding it "a textbook example of ethnic cleansing."
Suu Kyi has cancelled a trip to the UN General Assembly in New York next week to deal with the crisis. Rycroft said two high-level meetings on Myanmar were due to be held during the gathering of world leaders at the United Nations.
"The humanitarian situation is catastrophic," Guterres said. "This is a dramatic tragedy. People are dying and suffering in horrible numbers and we need to stop it."