US Army Secretary Francis Harvey has resigned amid a row over the treatment of wounded US soldiers.
The scandal over conditions at the hospital erupted last week
The move follows critical reports in the US media about the care of troops wounded in Afghanistan and Iraq at Washington's Walter Reed hospital.
The Washington Post said last week that some of the soldiers lived in buildings infested with rodents and cockroaches.
Mr Harvey was appointed in November 2004 and was responsible for the efficient functioning of the US army.
Mr Harvey's resignation was announced by Defence Secretary Robert Gates.
It came a day after the head of Walter Reed Army Medical Center, Maj Gen George Weightman, was fired.
"I am disappointed that some in the army have not adequately appreciated the seriousness of the situation pertaining to outpatient care at Walter Reed," Mr Gates said.
"Some have shown too much defensiveness and have not shown enough focus on digging into and addressing the problems," he added.
Francis Harvey was appointed army secretary in 2004
The Washington Post newspaper claimed in a series of articles that conditions at Walter Reed, the most famous veterans' hospital in the US, were poor.
Outpatients lived in rat-infested rooms and bureaucracy got in the way of those trying to provide help to often badly injured soldiers, the articles reported.
The BBC's Justin Webb in Washington says that America's wounded veterans are regarded by most people in the country as truly heroic, so the fall-out has been considerable.
Mr Gates said that he was "concerned that some do not properly understand the need to communicate to the wounded and their families that we have no higher priority than their care".
"Our wounded soldiers and their families have sacrificed much and they deserve the best we can offer," he added.
According to our correspondent, the White House will hope that this trenchant intervention from Mr Gates will protect the president from political damage.
President George W Bush has been forced to address the issue in his weekly radio address - to be broadcast on Saturday - acknowledging that the treatment of the veterans has not been good enough.
"This is unacceptable to me, it is unacceptable to our country and it's not going to continue," he said, in an excerpt released by the White House.
He has announced that a cross-party commission will be formed to oversee health care for veterans.
Nonetheless, for many Americans it is a shock to discover that the men and women they care so deeply about have been so badly let down, our correspondent adds.