The United States has urged Asian countries to jointly put pressure on North Korea to abandon its nuclear plans, but said the crisis can be resolved peacefully.
Wolfowitz said multilateral approach was essential
Speaking at a conference of Asia-Pacific defence ministers in Singapore, US Deputy Defence Secretary Paul Wolfowitz warned that Pyongyang's nuclear programme was leading it down a "blind alley".
"Countries... that are helping keep North Korea afloat need to send a message.. that they are not going to continue that if North Korea continues down the road its on," Mr Wolfowitz said.
He also rejected the idea of bilateral talks between Washington and Pyongyang, saying that a "multilateral approach... is essential".
The second annual Asia Security Conference comes at a time when concerns about security are at the top of the agenda for many Asian governments.
I am afraid that further escalation of the situation would require tougher measures
Japanese Defence Minister Shigeru Ishiba
The gathering is taking place amid tight security designed to protect delegates from possible terrorist attacks and the disease Sars.
Fever-detecting thermal cameras scanned people entering the conference hotel to ensure they are not infected with Severe Acute Respiratory Syndrome.
Mr Wolfowitz warned that North Korea's actions over the past year threatened regional and global stability, saying that Pyongyang has shown little regard for the delicate nature of the security environment in the region.
The meeting is taking place amid tight security
He stressed that of particular concern was the growing potential for North Korea to use nuclear weapons and the possibility it might sell its weapons technology to the highest bidder.
However, Mr Wolfowitz said that despite what he called the immediate danger, a peaceful solution was possible.
He said a "consensus is beginning to take shape that the only way we are going to be able to solve this problem peacefully is through a carefully managed multilateral approach".
Japan - one of Washington's key allies in the region - supported America's stance that all options should be kept open when considering how to force Pyongyang to disarm.
"I am afraid that further escalation of the situation would require tougher measures," Japanese Defence Minister Shigeru Ishiba told the conference.
Mr Wolfowitz also defended America's plans to reorganise its 100,000 military personnel in the region.
Lee is one of Asia's elder statesmen
But he insisted that "no decisions have been made yet" on the issue, as Washington was in the process of taking a "fundamental look" at America's military posture worldwide.
Earlier, Mr Wolfowitz denied US media speculation that the Pentagon was considering moving troops stationed on the Japanese island of Okinawa to Australia.
The BBC's David Bottomley in Singapore says the issue of terrorism will be the focus of attention for the remainder of the conference.
The event comes at a time when the terrorist bombings in Bali are still fresh in many people's minds.
Security agencies throughout the region are still trying to gather intelligence on Jemaah Islamiah, the militant Islamic group blamed for the attack, and also for a plot to bomb targets in Singapore.
Warning to US
Earlier, Singapore Senior Minister Lee Kuan Yew warned the US against unilateralism in a wide-ranging keynote speech.
"If America does not cultivate its friends and allies with more tender loving care, coalitions of the willing may become smaller," he said.
North Korea has not accepted an invitation to attend the meeting and Chinese defence officials have also stayed away. But several Chinese defence academics are participating.
The North Korean nuclear crisis began last October after Washington said that Pyongyang had admitted to secretly resuming its nuclear programmes it froze in 1994.