Dr Rowan Williams argued it has become difficult for the Church to convey its message because of the popularity of non-believers such as Richard Dawkins and Christopher Hitchens.
He said attempts to reverse the decline in worshippers had begun but that there will be "no quick fix".
His remarks came despite new research, released by the Roman Catholic Church, suggesting that the Pope's visit to Britain a year ago has brought a lasting rise in the level of spiritual and religious feeling in the country.
Speaking at Canterbury Cathedral in a public conversation with Frank Skinner, the comedian, Dr Williams argued that the growing popularity of atheism had not necessarily led to a fall in the number of people who believe in God.
"I'd want to know how many atheists [Richard Dawkins' book] The God Delusion created," he said.
"The book sold, but did it make a difference to the number of people who were actually committed one way or the other?
He continued: "I'm not avoiding the point that the coolness of atheism is very much in evidence. The problem is it's become a bit of a vicious circle. Atheism is cool, so books about atheism are cool.
"They get a high profile, and books that say Richard Dawkins is wrong don't get the same kind of publicity because atheism is the new cool thing.
"It's difficult to break into that, but plenty of people are trying."
The archbishop said that Christian witness is the strongest argument the Church has to rebut the claims of atheists such as Dawkins. He said the evolutionary biologist would struggle to explain the growth of the Church in Zimbabwe in the face of constant brutality and harassment.
However, he admitted that the Church of England is struggling to boost its own levels of attendance.
"The reality is we have a lot of parishes, a lot of very average people trying to make sense of their lives.
"One of the things we've been trying to do in the last seven or eight years is find a strategy that says we as a church can't just wait for people to turn up for us – we ought to be going to where they are."
The archbishop said there was a new emphasis on holding prayer groups in cafés and pubs, but added: "It doesn't work in terms of huge figures and I don't expect it to."
Opinion poll findings released by the Roman Catholic Church show there has been a rise in the level of religious belief in this country following last year's papal visit. Crowds of up to 600,000 lined the streets and attended big set-piece events when Pope Benedict XVI came to England and Scotland last September.
A survey for the Church found that the number of Britons claiming to be spiritual or religious rose from 38 per cent before the papal visit to 47 per cent immediately after. One year on, half of the population now shares this sentiment. According to the poll by Opinion Research Business, the number of atheists in Britain has fallen slightly from 18 per cent before the visit to 16 per cent now.
The ORB survey, which interviewed 2,049 adults, found 59 per cent of Britons agree there should be a place for religion in public life. Nearly half of those polled said the Catholic Church should take a moral lead in British society by defending the family.
The Most Rev Vincent Nichols, the Archbishop of Westminster, said the findings showed there is sympathy for the Pope's call for greater recognition to be given to religious faith in society.
"The important, ongoing debate about the moral principles and values which are needed to underpin a stable, flourishing society is illuminated by the light of Religious faith."
In a statement released to mark the one year anniversary since the Pope's visit, the Prime Minister said he is "deeply proud of the enormous contribution people of faith have made to our society."
He continued: "The Pope's message is just as relevant today. The shocking riots in the UK underline that we need more than ever to build a new culture of social responsibility."