Doctors whose English is not up to scratch could be struck off amid fears that patients are being put at risk.
Plans unveiled today would also see senior medics ordered to ensure that all staff at their organisations have adequate language skills.
Concerns have been raised after cases in which foreign doctors were said to have provided sub-standard care.
Those coming to the UK from outside the EU already face strict language tests. But some 23,000 doctors from within the area are said to have registered to work in the NHS without being asked if they can speak English properly.
Health Secretary Andrew Lansley said the moves, being put out for consultation, would help protect patients.
"It is absolutely crucial that we get this right," he said. "Clearly if a doctor can't speak proper English then they won't be able to communicate effectively with their patients.
"It can also lead to situations where doctors put patients' safety at risk.
"The last Government knew this was a problem but failed to change the system to protect patients.
"We will create a legal duty that will mean doctors in hospitals and in the community will have to ensure that anyone hired is able to speak English and is suitably qualified and experienced for the role.
"This will create proper accountability and will leave no-one in any doubt about our desire to protect patients."
Some 500 "responsible officers" at hospitals and other organisations will be tasked with checking language skills.
Mr Lansley went on: "We need to bring some common sense back and ensure that if a doctor is judged not to have the language skills to be able to work properly or safely in the NHS that they can be suspended or removed from the register.
"Under the current system, if there are serious concerns about a doctor who can't speak English it can still be difficult to strike them off unless they have actually harmed a patient.
"That is not good enough and it has to change.
"We must be able to take action to protect patients if there are genuine concerns rather than just hoping for the best.
"So we will look to amend the General Medical Council's powers to make it easier for them to take action if concerns are raised about a doctor's suitability."
The General Medical Council has been pushing for stronger language testing since the case of David Gray, who died in Cambridgeshire in 2008.
He was killed by German doctor Daniel Ubani who administered 10 times the normal dose of diamorphine.
Dr Ubani admitted being exhausted after getting only a couple of hours sleep before starting his shift in the UK, and said he was confused about the difference between drugs used here and in Germany.
His poor English meant he was refused work by the NHS in one part of the country but was later accepted in Cornwall.