Haley did not explicitly threaten to quit the body if Washington's concerns were not addressed, a prospect that first emerged in February in a leaked letter by Secretary of State Rex Tillerson.
But in a speech in Geneva, she said "the United States is looking carefully at this council, and our participation in it.
"Being a member of this council is a privilege, and no country who is a human rights violator should be allowed a seat at the table", Haley added.
Washington has long denounced the agenda item dedicated exclusively to criticising Israel's treatment of the Palestinians.
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It has also raised concerns about a nomination process that often sees prominent rights abusers elected to one of the council's 47 rotating seats.
While Haley has escalated those criticisms since becoming Washington's UN ambassador, her today's speech was mild compared to past remarks, including an assault she levelled in a June 2 Washington Post op-ed.
Writing in the Post, she asked "whether the Human Rights Council actually supports human rights or is merely a showcase for dictatorships that use their membership to whitewash brutality".
Haley doubled down on attacking Venezuela today, urging Caracas to "voluntarily step down from its seat... Until it can get its own house in order."
The country is reeling from two months of anti-government protests that have left dozens dead.
Turning to Israel, Haley reiterated US concerns over unfair treatment of the Jewish state.
It "is essential that this council address its chronic anti-Israel bias, if it is to have any credibility", she said.
Israel and its allies have repeatedly chastised the council for allowing majority-Muslim states to pass a steady stream of resolutions each session denouncing abuses against the Palestinians.
Haley said today the US had identified "some areas for significant strengthening" of the council and praised past resolutions that gave "hope to people who are fighting for justice".
She would outline a set of specific reform proposals later Tuesday in a speech at the Graduate Institute in Geneva, she added.
The head of Human Rights Watch's Geneva office, John Fisher, agreed with Haley that a reformed membership process would make the body stronger.
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