It blames a "culture of concealment" at Boeing, but says the regulatory system was also "fundamentally flawed".
Boeing said it had "learned many hard lessons" from the accidents.
But families of the victims accused the company and the regulator of continuing to hide information.
The US report is highly critical of both Boeing and the regulator, the Federal Aviation Administration (FAA).
"Boeing failed in its design and development of the Max, and the FAA failed in its oversight of Boeing and its certification of the aircraft," the 18-month investigation concluded.
The Boeing 737 Max has been grounded since March 2019 after two crashes, in Indonesia and Ethiopia, caused the deaths of 346 people.
The nearly 250-page report found a series of failures in the plane's design, combined with "regulatory capture", an overly close relationship between Boeing and the federal regulator, which compromised the process of gaining safety certification.
"[The crashes] were the horrific culmination of a series of faulty technical assumptions by Boeing's engineers, a lack of transparency on the part of Boeing's management, and grossly insufficient oversight by the FAA."