The Macpherson report was published after the murder of black teenager Stephen Lawrence, helping to usher in a new era of policing and race relations in Britain.
The family of the 18-year-old student will mark 10 years since the report's publication this week, and Mr Straw commented on racism in Britain's biggest force ahead of the anniversary.
He told the BBC's Politics Show: "If you are asking me whether I believe the Met as a whole is still institutionally racist, the answer is no."
But he tempered his comment by admitting there may still be "pockets" of institutional racism in the force.
"If you ask me do I believe that it's perfect as an institution and that black and Asian people, and indeed women, have the same opportunities in practice as white males, I think the answer is - probably not in some areas," Mr Straw said.
"There may still be pockets of institutional racism."
Government ministers and senior officers have overseen a relentless drive to erase the tag of institutional racism from the Metropolitan Police and other forces.
But many continue to question whether people can ever be treated equally, regardless of their race or religion, by the police or within the service itself.
Stephen's mother Doreen will join Mr Straw and Scotland Yard Commissioner Sir Paul Stephenson at a conference to mark the report's anniversary on Tuesday.
The central London event, organised by the National Police Improvement Agency, will examine what progress has been made over the past decade.
A-level student Stephen was stabbed to death by a gang of racist thugs as he waited at a bus stop in Eltham, south-east London, in 1993.
Retired High Court judge Sir William Macpherson delivered a damning assessment and made 70 recommendations, and his work is seen as a defining moment in race relations.
The most powerful criticism was a verdict of "institutional racism" within the Metropolitan Police and the service generally.
A decade on, senior officers, politicians and interest groups continue to struggle with the challenges of eradicating lingering discrimination.
A £100,000 review of race and faith at the Metropolitan Police heard evidence from its first witnesses last week and will report back in the summer.
London Mayor Boris Johnson called for the inquiry at the peak of a race row at Scotland Yard that engulfed several senior officers.
Earlier this month the Runnymede Trust, chaired by Richard Stone, who advised the Macpherson inquiry, published a review of progress.
It concluded black and Asian people still suffered discrimination in the police service and at the hands of the police.
But a report by Trevor Phillips, head of the Equality and Human Rights Commission, found police could no longer be accused of institutional racism.
It said the service faced difficulty in recruiting, retaining and promoting officers from black and Asian communities.
One senior officer said continuing to describe the police as institutionally racist was unfair and unhelpful while failing to take account of progress that had been made.
But Devon and Cornwall Chief Constable Steve Otter, of the Association of Chief Police Officers, admitted more work must be done to improve race relations.
He said targets set by Sir William, particularly around minority recruitment, remained "very ambitious" but acted as a catalyst for change and its aims continued to receive "broad and unflagging" support.
Mr Otter said: "A police service which recognisably reflects our society is vital to increasing the confidence that all communities can have in it."
He added: "Ultimately police officers and the police service as a whole share a determination to serve the public as best they can and the lessons, however painful, are a price worth paying.
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