Pullman has been castigated by parts of the Roman Catholic church, particularly in North America, as many consider the trilogy His Dark Materials to be a veiled attack on it.
But, speaking at the Hay Festival in Wales, Dr Williams defended Pullman.
He said: "First of all he takes the Christian myth, or a version of it, seriously enough to want to disagree passionately with it.
"It's not just dull or remote, it's dangerous. You've got to tussle with it. It's still alive."
Although he stressed he disagreed with Pullman's atheistic view, he commended his "search for some way of talking about human value, human depth and three-dimensionality, that doesn't depend on God."
Merely to ask the question was important, he said.
He agreed with the thrust of Pullman's novels that religious authorities must not silence the "demons" that people carry with them – the essential "internal conversation" between good and evil.
He said: "The threat in Pullman's novels is the Authority – people like me in his imagination – which wants to divide the human spirit and cut off and silence that demonic voice, that voice of the imagination.
"And so you end up with these unforgettably poignant pictures of children who have had their demons taken away, who are just lifeless automata.
"And that's evil, that's the essence of evil."
He concluded: "I feel that that awareness of the inner conversation, the inner dialogue, that has to be part of a sensible, credible modern dialogue about the soul."
In 2007 Roman Catholic groups called for a boycott of the film The Golden Compass, starring Nicole Kidman and Daniel Craig, which was based on Northern Lights, the first book in the trilogy.
Bill Donohue, president of the Catholic League in the United States, described the books as "atheism for kids".
Chris Weitz, the film's director, responded by saying: "I think Philip Pullman takes issue with dogma. He is not anti-Catholic or anti-religion."
Dr Williams made his comments about Pullman after telling the Hay audience that he thought theology had become less relevant to the "intellectual mainstream" since the 19th century.
Asked by the writer AN Wilson whether modern literature had "come adrift" from the worlds of philosophy and theology, Dr Williams admitted: "Theology has itself in some ways drifted out of the intellectual mainstream. On the whole theology doesn't figure
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