Gates told the US House of Representatives' Science and Technology Committee that the 65,000 H-1B visas allotted for professional workers annually were inadequate, pointing out the 2007 quota was filled on the first day they became available.
Gates argued that the US had the best schools, especially in engineering and computer science.
"The majority of the students in the computer science department are foreign-born," said the Microsoft founder, adding they were often unable to get visas to stay.
"The preference for a company like Microsoft is to hire these people."
Rep. Dana Rohrabacher, a California Republican, said Microsoft and other companies wanted more H-1B visas because foreign-born workers were cheaper. In order to hire enough Americans, he said, "You'd have to raise wages."