In a sensational speech to the 20th Congress of the Communist Party Mr Khrushchev painted a graphic picture of a regime of "suspicion, fear, and terror" built up under the former dictator who died three years ago.
He said he wanted to break the "Stalin cult" that has held Soviet citizens in its thrall for 30 years.
The prime minister described the purges during the period of 1936-38.
He implied that one of Stalin's most trusted aides Kirov had been assassinated in 1934 at the leader's behest.
Stalin then initiated a series of trials of members of the politburo and had some executed for Kirov's murder, including Zinoviev, Kamenev and Rykov.
Stalin meted out humiliation and persecution to those officers and members of the Politburo who fell from favour, said Mr Khrushchev.
He revealed that in 1937 and 1938, 98 out of the 139 members of the Central Committee were shot on Stalin's orders.
The leader also criticised Stalin's foreign policy during World War II. As an ally of Adolf Hitler, Stalin refused to believe Germany would invade Russia - despite warnings from Winston Churchill and Sir Stafford Cripps, the British Ambassador in Moscow, amongst others.
When the attack was launched, Stalin ordered the Red Army not to retaliate saying the raid was merely "indiscipline" on the part of some of Hitler's units.
Mr Khrushchev also condemned Stalin's autobiography as an "odious book" in which Stalin refers to himself as "the workers' genius-leader" and a "shy and modest person".
He also accused Stalin of violent nationalism and anti-Semitism.
He revealed that in his last will and testament Lenin advised against the retention of Stalin as general secretary of the Communist Party.
He said the information he had just divulged should only be made known to the public by degrees.
"You understand, comrades, that we could not spread this information to the people at once," he said. "It could be done either suddenly or gradually, and I think it would be more correct to do it gradually."
Mr Khrushchev's "secret speech" was not made public until 18 March 1956 and then only in Belgrade and Washington. It had a dramatic effect in Eastern Europe where "de-stalinisation" raised expectations of change, especially in Poland and Hungary.
The text of the speech was not published in Russia until 1988, some 32 years later.
Lenin's last will and testament was published in The New York Times in 1926, though it was not made public in the Soviet Union until Khrushchev's announcement.
Party agitators (official propagandists) were sent to Georgia to disseminate revelations about Stalin, where opposition to the new information was anticipated.
In the wake of the denouncement, Mr Khrushchev's pictures were torn down in Georgia, Stalin's home state. Riots occurred for several days in Tbilisi as Georgians reacted angrily to the denunciation of their hero.