Biden warned Moscow against a full invasion, saying: "Our allies and partners are ready to impose severe costs and significant harm on Russia and the Russian economy."
"If they actually do what they're capable of doing with the force they've massed on the border, it is going to be a disaster for Russia," Biden told reporters.
"The cost of going into Ukraine in terms of physical loss of life, for the Russians... it's going to be heavy."
The US leader sparked controversy however when he suggested that "something significantly short of a significant invasion" would be met with a lesser pushback from NATO.
"It's one thing if it's a minor incursion, and then we end up having a fight about what to do and not do, etcetera," he said.
'Swift' and 'severe'
The White House moved swiftly to clarify Biden's comments, with press secretary Jen Psaki vowing: "If any Russian military forces move across the Ukrainian border, that's a renewed invasion, and it will be met with a swift, severe, and united response from the United States and our allies."
Psaki further stressed in a statement that Russian "have an extensive playbook of aggression short of military action, including cyber attacks and paramilitary tactics."
Biden "affirmed today that those acts of Russian aggression will be met with a decisive, reciprocal, and united response," she said.
Asked directly if Biden was giving tacit approval for a limited Russian move against Ukraine, White House National Security Council spokeswoman Emily Horne said Biden was speaking of non-military interference in the country.
Nevertheless, Biden was blasted for the comment by Republican opponents.
"Joe Biden's impotence emboldened Vladimir Putin and now he just green-lighted Putin to invade Ukraine," tweeted Senator Tom Cotton.
'Room to work'
Biden was speaking ahead of a meeting on Friday in Geneva between US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov in Geneva.
Blinken held meetings in Kyiv Wednesday in preparations for the Geneva talks, and urged Moscow to choose the "peaceful path."
In Washington Biden appeared to suggest ways of deconfliction, playing down Putin's biggest worries, that Ukraine would join NATO and that the West would position strategic weapons in Ukraine.
And he opened the door for a new summit with his Russian counterpart.
"There's room to work if he wants to do that," he said.
"What I'm concerned about is this could get out of hand, very easily get out of hand, because of... the borders of Ukraine, and what Russia may or may not do," he said.
"I am hoping that Vladimir Putin understands that, short of a full-blown nuclear war, he is not in a very good position to dominate the world," Biden said.
"Putin has, I know, a stark choice, either escalation or diplomacy," he said.
"I think he will pay a serious and dear price for it if he doesn't think now."