Powell said McCain's choice of Palin raised questions about judgment.
"I don't believe she's ready to be president of the United States," Powell said.
McCain seemed dismissive of Powell's endorsement, saying he had support from four other former secretaries of state, all veterans of Republican administrations: Henry Kissinger, James A. Baker III, Lawrence Eagleburger and Alexander Haig.
"Well, I've always admired and respected Gen. Powell. We're longtime friends. This doesn't come as a surprise," he said on "Fox News Sunday".
Asked whether Powell's endorsement would undercut his campaign's assertion that Obama is not ready to lead, McCain said: "Well, again, we have a very, we have a respectful disagreement, and I think the American people will pay close attention to our message for the future and keeping America secure."
Obama called Powell to thank him for the endorsement, Obama spokesman Robert Gibbs said.
"I am beyond honored and deeply humbled to have the support of Gen. Colin Powell," Obama said in remarks prepared for a rally in Fayetteville, N.C. "Gen. Powell has defended this nation bravely, and he has embodied our highest ideals through his long and distinguished public service. ...And he knows, as we do, that this is a moment where we all need to come together as one nation – young and old, rich and poor, black and white, Republican and Democrat."
Powell said he remains a Republican, even though he sees the party moving too far to the right. Powell supports abortion rights and affirmative action, and said McCain and Palin, both opponents of abortion, could put two more conservative justices on the Supreme Court.
"I would have difficulty with two more conservative appointments to the Supreme Court, but that's what we'd be looking at in a McCain administration," Powell said.
Powell, 71, gained popularity while serving as chairman of the Joint Chiefs of Staff, the nation's top military commander, during the first Gulf war under President George H.W. Bush. After retiring from the military, speculation mounted that he would run for president in 1996 – perhaps becoming the nation's first black president – but Powell opted against it.
As secretary of state, he helped make the case before the United Nations for the US-led invasion of Iraq, launched in March 2003.
Powell said the nation's economic crisis provided a "final exam" of sorts for both Obama and McCain.
"In the case of Mr. McCain I found that he was a little unsure as to how to deal with the economic problems that we were having," Powell said. "Almost everyday there was a different approach to the problem and that concerned me, sensing that he doesn't have a complete grasp of the economic problems that we had."
In contrast, Powell said Obama "displayed a steadiness, an intellectual curiosity, a depth of knowledge and an approach to looking at problems like this ..."
"I think that he has a definitive way of doing business that would serve us well," Powell said.
Powell said he does not plan to campaign for Obama.
(Agencies via China Daily October 20,2008)
