South Africa has become one of the most violent societies on earth and its citizens need to face up to changes that have taken place since apartheid and regain its spirit of compassion, says Nobel Peace Prize laureate Archbishop Emeritus Desmond Tutu.

"Very simply, we are aware we've become one of the most violent societies. It's not what we were, even under apartheid," Tutu said on Thursday at a ceremony in Cape Town to celebrate winning the Templeton Prize.

The 81-year-old peace campaigner won the $1.7 million prize for his life-long work in advancing spiritual principles such as love and forgiveness to help to liberate people around the world, the John Templeton Foundation said on April 4.

Tutu said South Africa became the "flavor of the month" when it officially ended apartheid in 1994 and established the Truth and Reconciliation Commission.

During the last three decades of the 20th century he campaigned vigorously against South Africa's racist ideology, but showed compassion to both sides in the struggle.

"We can't pretend we have remained at the same heights and that's why I say please, for goodness sake, recover the spirit that made us great."

Tutu, the former Anglican Archbishop of Cape Town was asked how the country was failing when he spoke about the violent society it is.

He is known for speaking out about injustices from whatever side they come, and for his charismatic preaching peppered with heart-wrenching anecdotes.

The archbishop cited rape, murder and the high number of road accidents, especially over the holiday season as being worrisome and that South Africa is one of the most unequal societies in the world.

He said a lack of spirituality underpins the problem.

"This is why we ought to be saying it is utterly blasphemous that we should still have people who live in shacks. It's not politics, it's religion."

Tutu said it is the responsibility of everyone to see the divine in others, even in the man sleeping in the street.

He said he has great faith in young people being able to deliver on this aspiration.

"There is no question at all that young people know what they are looking for and almost all would say it's a spiritual thing," Tutu said.

South Africa can regain its worth by spreading the spirit of compassion Tutu said.

"You start at the beginning. You start with yourself and people in your immediate environment, the people you would easily dismiss."

The 2012 Templeton Prize winner was Tibetan Buddhist leader the Dalai Lama, who is also a Nobel Peace Prize laureate and a friend of Tutu's.