Ayatollah Sistani, who is revered by millions and has unmatched prestige in Iraq, has made several calls for reforms this month that have played a major role in a wide-ranging anti-corruption drive by Prime Minister Haider al-Abadi.
"Today, if true reform is not realised by fighting corruption without mercy and realising social justice on different levels, it is expected that circumstances will become worse than before," Ayatollah Sistani said in a written response from his office to questions from AFP.
Iraq could be "dragged to... partition and the like, God forbid," he said.
It was Ayatollah Sistani's most direct warning yet on the possible consequences if reforms he has advocated are not carried out.
Ayatollah Sistani said that corruption had already cost Iraq dearly in the conflict with the Islamic State terrorist group, which overran around a third of the country last year.