Washington's top diplomat said he held "frank" discussions with Myanmar President Thein Sein on the sidelines of Southeast Asian meetings, warning that there was still "a lot of work to be done" as the country emerges from decades of military rule.
Kerry said Myanmar was on an "amazing journey" but vowed not to "turn a blind eye" to the country's "significant challenges", including ethnic unrest, religious violence, concern over press freedoms and the complexity of moving from junta rule to democracy.
"Next year's election will absolutely be a benchmark moment for the whole world to be able to assess the direction that Burma (Myanmar) is moving in," he told reporters at a press conference in the Myanmar capital Naypyidaw.
Thein Sein, a former general who shed his military uniform to lead a quasi-civilian government three years ago, has overseen broad reforms that spurred the removal of most international sanctions.
The changes include freeing political prisoners, scrapping draconian press censorship and welcoming opposition leader Aung San Suu Kyi into parliament.
Those steps have seen most international embargoes dropped and enticed a horde of foreign investors eager to tap into one of Asia's last frontier markets.
Kerry, who was in the country for talks with members of the Association of Southeast Asian Nations (ASEAN) and other global powers, said the US would work "hand in hand" with Myanmar to help the reforms.