Inspectors rated it as inadequate, blaming a culture of bullying and problems with poor emergency response times.
England's Chief Inspector of Hospitals, Professor Sir Mike Richards, said putting the trust in special measures was a necessary step for improvement.
"The trust has been performing poorly on response times since March 2014.
"This is a very serious problem, which the trust clearly isn't able to address alone, and which needs action to put right."
He praised the frontline staff as dedicated, hardworking and compassionate but said they were not being properly supported to do their jobs.
"Some reported a culture of harassment and bullying and we found that in many cases there just weren't enough properly trained staff, or that the proper equipment wasn't available to them."
Inspectors found dirty equipment, a lack of staff training and poor leadership.
Some black and minority ethnic staff told the inspectors that at times they felt "humiliated" and "ignored" by managers.
Some claimed they were overlooked for promotion.
The response time for the most urgent calls - Category A to be responded to within eight minutes - is the worst in the country.
The trust has not hit the target once since May 2014.
Sir Mike said: "While we do have significant concerns about the performance of the ambulance service, I want to provide Londoners with some reassurance.
"Urgent steps are being taken - and improvements have already been made - to ensure that everyone who relies on this service receives excellent, timely care and that London has the ambulance service it deserves."
UNISON general secretary, Dave Prentis, said: "This is a shocking indictment of the lack of funding that has gone to the ambulance service over the last five years. This is a particular problem in London where demand has soared in recent years."
The trust says it has now taken action to address the failings.
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