A Washington Post article found that soldiers wounded in Iraq and Afghanistan were living in a rundown building infested with mice, mould and cockroaches.
"The problems at Walter Reed were caused by bureaucratic and administrative failures," Bush said.
The dilapidated building has since been closed and the patients have been moved to other facilities at Walter Reed.
The reports on Walter Reed provoked an outcry on Capitol Hill. Three senior military officers have lost their jobs and Bush has ordered a wide-ranging review of all US veteran facilities.
"Our military hospital system is in a state of crisis. Delays and rhetorical band-aids will not move us closer to a solution"
US Senator Barack Obama
Bush toured a physical therapy unit where soldiers, many of whom had lost limbs, were exercising on elliptical machines and weight presses.
Bush has often visited wounded soldiers and their families at Walter Reed and at other military hospitals but meetings were almost always private.
Democrats called Bush's visit a "photo-op" and urged him to back off his threat to veto a war-spending bill that has $4.3 billion in health aid for returning soldiers.
Bush plans to reject the Democratic-crafted measure because it includes timelines for troop withdrawals from Iraq. He has cited the need to support the troops in calling on Congress to urgently send him a clean bill.
Senator Barack Obama, an Illinois Democrat who is also seeking his party's 2008 presidential nomination, accused Bush of being slow to tackle problems with veteran health care.
"The problems plaguing our military hospital system will not be solved with a photo op," he said in a statement.
"Our military hospital system is in a state of crisis. Delays and rhetorical band-aids will not move us closer to a solution."
More than 24,000 soldiers have been wounded and more than 3,600 killed so far in Afghanistan and Iraq.