"What has held us back until now is not just shortfalls of capacity, it is a lack of political will," she told the European Parliament in Strasbourg.
While U.S.-led NATO has long shouldered the military burden in Europe, China's rise, a more aggressive Russia, and Washington's calls for Europe to do more for its own security are pushing the bloc to develop a more forceful foreign policy.
Echoing a call in 2016 by her predecessor Jean-Claude Juncker, von der Leyen said the EU needed a "defence union" that would cement joint military action, going beyond its traditional soft power as the world's largest trading bloc.
She proposed waiving value-added tax on weapons developed and sold in the bloc by EU governments, establishing a joint situational awareness centre to improve intelligence-sharing, and better defences against cyber attacks.
"We are entering a new era of hyper-competitiveness, an era in which some stop at nothing to gain influence," she warned. She did not name China and Russia but went on to talk about misinformation, vaccines and loans, all areas in which Beijng and Moscow are accused of seeking advantages.
Von der Leyen and French President Emmanuel Macron, a vocal advocate of an independent EU military, will convene a defence summit when France takes over the bloc's presidency early next year, she said.
The EU must also do more to counter China's building of infrastructure around the world, von der Leyen said.
"We're pretty good at financing roads, but it doesn't make any sense for Europe if we build a perfect road between a Chinese copper mine and a harbour that's Chinese-owned."
Von der Leyen's two years as Commission president have seen the bloc's resilience tested by the coronavirus pandemic and related economic downturn, strains over Britain's departure from the bloc and weakening rule of law in some eastern members.
Warning against "a pandemic of the unvaccinated", she argued that the pace of COVID-19 vaccination must be quickened.
After a slow start, about 70% of the 27-nation EU's adult population has been fully vaccinated, but there are big differences among EU countries.
She also announced a donation of 200 million vaccine doses for third countries by mid-2022, on top of a previous commitment for 250 million jabs.
Von der Leyen, an ally of outgoing German Chancellor Angela Merkel, said tackling climate change and a digital transformation of the EU's economy were priorities.
The Commission will present a "European Chips Act" to design and produce microchips, she said, echoing U.S. plans.
Von der Leyen also pledged to increase financial support to help poorer countries fight climate change and adapt to its impacts by an additional 4 billion euros ($4.73 billion) until 2027, and called on others, including the United States, to do more too.
"Closing the climate finance gap together, the U.S. and the European Union, would be such a strong signal for global climate leadership," she added.
Climate finance is expected to be a decisive issue at the United Nations' COP26 summit in November.
Wearing a mask emblazoned with the EU flag's circle of 12 gold stars, von der Leyen greeted lawmakers at the assembly with fist bumps ahead of her speech.
The first female president of the EU's executive and a mother of seven children, she promised a new legal act to combat violence against women in the bloc and new legal protections to strengthen journalists' safety.
Her objective, von der Leyen said, is "a union that is both beautifully unique and uniquely beautiful".
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(Reporting by Jan Strupcewzki, Marine Strauss, Gabriela Baczynska, Phil Blenkinsop, Yves Herman, Foo Yun Chee, Kate Abnett, Robin Emmott Writing by Ingrid Melander and John Chalmers; Editing by Catherine Evans) ((firstname.lastname@example.org, Twitter @IngridMelander;))