"It's got a terrible impact," Mattis told an audience at Johns Hopkins University's School of Advanced International Studies at an event to unveil the administration's new National Defense Strategy.
But Mattis gave no indication that the military's capacity to protect the American people will be compromised: "We will continue what we are doing but the value of the military is grossly enhanced by the sense that the American model of government, of the people, by the people, for the people, can function and carry out its governmental responsibilities."
If the government shuts down, the military is considered essential and would still report for duty, US officials have said.
Military personnel must report to work and will be paid for the first pay period after the shutdown ends. In the 2013 shutdown, Congress passed a bill that paid military personnel through the shutdown.
While making clear that US troops would continue to perform their duties at home and deployed overseas, Mattis said that over 50% of the civilian workforce would not come to work and that maintenance operations and the training of reservist troops would be affected.
"I would just tell you our maintenance activities will probably pretty much shut down. We will not be able to induct any more of our gear that need maintenance," Mattis said.
Mission critical maintenance directly supporting operations overseas will likely continue despite a shutdown but US-based maintenance would likely be affected.
"Over 50% altogether of my civilian workforce will be furloughed, and that's going to impact our contracting. It'll impact obviously our medical facilities. It's got a huge morale impact, I'll just tell you, and how long can you keep good people around when something like this happens," Mattis added.
The Department of Defense employs approximately 750,000 civilian personnel.
Mattis also said that the majority of training for US military reservists would be canceled during a shutdown.
"Training for almost our entire reserve force will stop, and you must understand the critical importance of our reserves. They're the only shock absorber we have," Mattis said.
The secretary also said that "intelligence operations around the world" would stop due to their cost. However, it was not clear what operations he was referring to as mission critical operations are likely to continue.
While he warned of the impacts of a shutdown, during his speech Mattis slammed the types of temporary funding measures, known as continuing resolutions, that have been used to avert shutdowns in the past.
"As I stand here this morning, watching the news off the Hill, we're on the verge of a government shutdown or, at best, yet another debilitating continuing resolution," Mattis said, adding that such continuing resolutions wasted "copious amounts of precious taxpayer dollars."
"I am optimistic that Congress will do the right thing and carry out their responsibility," Mattis added.
But an internal Department of Defense memo sent Friday made it clear that while a continuing resolution was not ideal, it was preferred over a shutdown.
"The Secretary and I hope that the Congress will pass a (Continuing Resolution) or an annual appropriations bill for defense activities," Deputy Secretary of Defense Patrick Shanahan wrote in the contingency planning memo.
"However, prudent management requires that the Department be prepared for a lapse in appropriations," he added.