George Entwistle, who was announced as the 90-year-old media organisation's new boss in August, told hostile lawmakers that failures at the BBC had allowed Jimmy Savile, once one of Britain's top TV presenters, to prey on young girls for years.
He added he could not rule out suggestions that a paedophile ring might have existed at the state-funded BBC during the height of Savile's fame in the 1970s and 80s.
But Entwistle rejected claims that BBC bosses had tried to hide allegations against Savile, who died last year, or suppressed an inquiry by one of their own news programmes.
"This is a gravely serious matter and one cannot look back at it with anything other than horror," Entwistle told parliament's Culture and Media Committee.
"There is no question that ... the culture and practices of the BBC seemed to allow Jimmy Savile to do what he did, (which) will raise questions of trust for us and reputation for us."
Police are investigating allegations that the eccentric, cigar-chomping Savile, who hosted prime-time children's shows on the BBC, abused girls as young as 12 over six decades, with some of the attacks taking place on BBC premises.
Detectives announced a criminal inquiry into the claims on Friday, saying more than 200 potential victims had come forward.
The furore over Savile is the biggest controversy to hit the BBC since its director general and chairman resigned in 2004 after a judge-led inquiry ruled it had wrongly reported that former Prime Minister Tony Blair had "sexed up" intelligence to justify the 2003 invasion of Iraq.
It comes as British newspapers await the recommendations of a separate inquiry into journalistic ethics following a phone-hacking scandal at Rupert Murdoch's now closed News of the World tabloid that could have serious implications for the media.
The BBC, which holds a special place in Britons' affection and is paid for by a tax on viewers, has been under growing pressure since rival channel ITV exposed Savile's alleged crimes three weeks ago.
Prime Minister David Cameron said on Monday the BBC appeared to have serious questions to answer.
The most damaging aspect for Entwistle and senior managers was the accusation that a similar probe by the BBC's flagship "Newsnight" show was pulled a couple of months after Savile's death in October 2011 because it would clash with planned Christmas programmes celebrating his life and charity work.
Entwistle's predecessor as the BBC's Director General, Mark Thompson, who is the New York Times Co's incoming chief executive, said the Newsnight investigation was mentioned to him by a journalist at a drinks party last year, but he was later told it was not going ahead for journalistic reasons.
"I was never formally notified about the Newsnight investigation and was not briefed about the allegations they were examining and to what extent, if at all, those allegations related to Savile's work at the BBC," he said in a letter to a British lawmaker on Tuesday.
He added he would be happy to appear in front of the parliamentary committee or any other inquiry in future.
Newsnight's editor, Peter Rippon, stepped aside on Monday after the BBC said his explanation for shelving the story had been "inaccurate or incomplete", and Entwistle said Rippon had been wrong not to broadcast the report.
But he added: "I've been able to find no evidence whatsoever in the conversations I've had, and in the documents we've now pulled together, that any kind of managerial pressure to drop the investigation was applied."
At the time of the Newsnight probe, Entwistle was in charge of BBC television's commissioning and programming, and admitted the Head of News had briefly told him about it in December and that he might have to change the Christmas schedules, which included Savile tributes.
His failure to ask more questions about the Newsnight inquiry was ridiculed by some of the lawmakers, with one saying he showed a lamentable lack of knowledge.
Another likened his answers to those given by Murdoch's son James during questioning over phone-hacking when he appeared not to know what was going on within his media organisation.
"You sound like James Murdoch now," Damian Collins said.
Entwistle admitted the BBC had taken longer to address the growing crisis than it should have but had been at pains to avoid causing any damage to the police investigation.
"We have done much of what we should have done," he said, explaining he had ordered two independent reviews.
Asked if it was likely that sexual abuse of children and young women had been widespread at the BBC, he said: "I don't yet have enough of a picture to know whether it was endemic."
He revealed the corporation is now investigating up to 10 "serious allegations" involving past and present employees over the "Savile period" and described the "Jim'll Fix It" star as a "skilful and successful sexual predator who covered his tracks".
Former colleagues have come forward to say there had been rumours for years involving young girls and Savile, famous for his garish outfits and long blonde hair. He was knighted by Queen Elizabeth for his extensive charity work.
Other BBC employees have talked of a culture at the corporation where women were groped and have hinted that Savile was not the only household name to have been involved.
Paid for by a yearly levy of 145.50 pounds ($230) on all British households with a colour TV, critics have queried whether this licence fee funding arrangement should continue when some private media companies are struggling.
Charlie Beckett, founding director of the Polis media think-tank at the London School of Economics, said managers at the BBC had tried to deflect blame and that was unacceptable.
"If we blame James Murdoch for what happened when he was in charge, then George, in terms of the Newsnight debacle and the general lack of grip, has been found wanting," he said.
