Francis' remarks are likely to antagonise pro-LGBT+ groups, since surrogacy is often used by gay or lesbian partners who want to have children, and follow his landmark decision to allow priests to bless same-sex couples.
"I deem deplorable the practice of so-called surrogate motherhood, which represents a grave violation of the dignity of the woman and the child, based on the exploitation of situations of the mother's material needs," he said.
"Consequently, I express my hope for an effort by the international community to prohibit this practice universally."
Francis, 87, made his comments in a 45-minute address to Vatican-accredited diplomats, which is sometimes called his "state of the world" speech.
There are few statistics on the number of babies born through surrogacy. Due to ethical concerns, the practice is illegal in many countries around the world, as well as in some U.S. states.
Critics of the practice warn of the potential for a "poverty bias" against women who become surrogate mothers due to financial need.
But interest continues to grow as more women opt to postpone pregnancy until later in life when fertility wanes, and as more same-sex couples look for ways to start families when they can't conceive on their own.
In Italy, the country that surrounds the Vatican, surrogacy is illegal, and Prime Minister Giorgia Meloni's right-wing coalition ruling is pushing through parliament a law that would extend the existing ban to punish couples who go abroad to carry out the procedure.
Francis, who leads the world's more than 1.35 billion Catholics, also reaffirmed the Vatican's condemnation of gender theory, which suggests that gender is more complex and fluid than the binary categories of male and female and depends on more than visible sex characteristics.
He called the theory "extremely dangerous since it cancels differences in its claim to make everyone equal".
