Writing in the memorial book of condolence, Cameron described the massacre as "a deeply shameful event in British history", adding "we must never forget what happened here".
He is the first serving prime minister to visit the Sikh holy city, the scene of the most notorious atrocity in Britain's imperial history in India when hundreds of people died after British troops opened fire on a protest.
In the condolence book, Cameron wrote: "This was a deeply shameful event in British history, one that Winston Churchill rightly described at the time as 'monstrous'.
"We must never forget what happened here, and in remembering we must ensure that the United Kingdom stands up for the right of peaceful protest around the world."
An inquiry commissioned by the Raj colonial authorities found that 379 people died in the public gardens of Jallianwala Bagh, though this figure has been widely challenged by Indian sources, who put the death toll at 1,000 or more.
The atrocity - portrayed in Richard Attenborough's film Gandhi - was seen as an important turning point on the road to the end of British rule in India.
The words of remorse were stronger than the comments of the Queen when she laid a wreath at the memorial in 1997 and described the massacre as a "distressing" example of the "moments of sadness" in Anglo-Indian history.
In 2005, as Foreign Secretary, Jack Straw visited the memorial and wrote: "This was a terrible occasion in which so many innocents were slaughtered: and for which I feel ashamed and full of sorrow. Thankfully, so many Punjabis now live in the United Kingdom in peace and harmony, and our two countries today enrich each other."
Cameron's visit to the site comes on the final day of a three-day trip, which has seen him lead the largest trade mission ever to travel overseas with a prime minister.
Cameron was shown around the Jallianwala Bagh Gardens by descendants of some of those who came under fire from troops under British command in 1919.
They pointed out the wall where bullet holes can still be seen from the massacre and the Martyrs' Well where many people died after seeking shelter from the volleys of bullets.
Speaking after the visit, the memorial's secretary Sukumar Mukherjee, whose grandfather survived the shootings, was asked if Cameron's words constituted an apology.
He replied: "He has come here, he has paid his tribute here. It is more than an apology."
But other descendants were not so happy.
Sunil Kapoor, 36, whose great-grandfather Wassoo Mal Kapoor died, said: "I'm not satisfied because he didn't meet the descendants. If you feel shameful then why not make an apology?"
Before visiting the massacre site, Cameron toured Amritsar's Golden Temple, the holiest site in the Sikh religion, bare foot and wearing a blue bandana head-covering.
The prime minister visited the kitchens which feed thousands of pilgrims every day and tried his hand at flipping chapatis before entering the historic shrine itself.
Speaking after his visit, the PM said: "In coming here to Amritsar, we should celebrate the immense contribution that people from the Punjab play in Britain, the role they play, what they give to our country.
"What they contribute to our country is outstanding and it is important to understand that and pay respect to that and to seek a greater understanding of the Sikh religion and that is why this visit to the holy temple, the Golden Temple, was so important."
Cameron made his entry in the book of condolence seated at a table before a memorial plaque which read: "This place is saturated with the blood of those Indian patriots who were martyred in a non-violent struggle to free India from British domination."
Before making his entry, the prime minister viewed the flame which burns continuously at the memorial in honour of the fallen.
Asked why he decided not to apologise, Cameron said: "In my view we are dealing with something here that happened a good 40 years before I was born, and we are dealing with something that ... the British government rightly condemned at the time.
"I don't think the right thing is to reach back into history and to seek out things that we should apologise for. I think the right thing to do is to acknowledge what happened, to recall what happened, to show respect and understanding for what happened.
The prime minister described his visit to Amritsar as "fascinating and illuminating" and said it was "a huge honour" to be first serving UK PM to enter the Golden Temple.
He said: "I am proud to be the first British prime minister to visit the Golden Temple and see what an extraordinary place it is - very moving, very serene, very spiritual."