"I believe we might need a complete defense reform at the level of a rebirth instead of making some improvements or modifications," the president said while meeting with six new top commanders of the three armed services in a promotion ceremony held at the presidential office Cheong Wa Dae.
"I believe another task now facing us is the urgent task of securing defense capabilities to counter North Korea's nuclear and missile provocations," he added, according to Cheong Wa Dae pool reports.
Moon's remarks came amid escalating tension caused by the communist state's recent missile launches and a fresh threat, filed earlier in the day by the North Korean military, to strike near US-controlled Guam with a barrage of missiles.
"The plan is to be reported to the Supreme Command soon after going through full examination and completion, and will be put into practice in a multi-concurrent and consecutive way any moment once Kim Jong-un, supreme commander of the nuclear force of the DPRK, makes a decision," an unidentified spokesman of the North's Korea People's Army said in a statement carried by the Korean Central News Agency. DPRK stands for North Korea's official name, the Democratic People's Republic of Korea.
US President Donald Trump earlier said the North will be met with "fire and fury" should it continue to make threats to the United States.
Part of efforts to strengthen Seoul's defense capability apparently includes building more powerful missiles.
While speaking with his US counterpart in a telephone conversation Monday (Seoul time), the new South Korean leader asked for the US president's support for a proposed revision to the Korea-US agreement on ballistic missiles that currently limits the range and payload of South Korean missiles to 800 kilometers and 500 kilograms, respectively.
Seoul hopes to increase the payload to at least 1,000 kilograms, which many experts say may be enough to destroy the North's deep-situated bunkers.
Moon also called for efforts to build enough capabilities to ensure the country's own security.
"Another task is that we must build self-reliant defense capabilities," he told the new military leaders.
"The goal of defense reform is to build a winning military, a highly confident military," the president was quoted as saying by his spokesman Park Soo-hyun.
"Most of all, it is important to secure capabilities that will ensure our victory in modern warfare and prepare us against North Korea's developing nuclear arms and missiles," he added.
The United States currently maintains some 28,500 US troops in South Korea as part of its defense alliance.
South Korea and the North remain divided, and technically at war, as the 1950-53 Korean War ended with an armistice, not a peace treaty. (Yonhap)