The former chief executive told the hearing in Central London that there were "no words" that would make the "sorrow and what people have gone through any better".
Ms Vennells became emotional as she told the inquiry: "I loved the Post Office, I worked as hard as I possibly could to deliver the best Post Office for the UK.
"I failed to recognise the imbalance of power between the institution and the individual. I let these people down."
Ms Vennells was accused of being in "la-la land" and responsible for her own downfall during questioning by Edward Henry KC, representing some of the subpostmasters.
He asked: "You exercised power with no thought of the consequences of your actions despite those consequences staring you in the face?" Ms Vennells replied: "I believed...that we were doing the right things and clearly that was not always the We did look at the case consequences.
"I understand your point that there are no words that I can find today that will make the sorrow and what people have gone through any better."
Mr Henry said Ms Vennells had "no one to blame but yourself" and she replied: "Where I made mistakes and where I made the wrong calls, where I had information and I made the wrong calls, yes of course.
"It was an extraordinarily complex undertaking and the Post Office and I didn't always take the right path."
Scrutinise
He asked her: "This is how you led, Ms Vennells. You led through. deception, manipulation and word weaving the reality you wanted in place."
Ms Vennells said: "That is not the case, Mr Henry. I worked in a very straightforward way. I did not work under deception.
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