Obama's first stop was a meeting with President Thein Sein, a former junta member who has spearheaded reforms since taking office in March 2011.
Tens of thousands of well-wishers, including children waving tiny American and Burmese flags, lined his route to the old parliament in the former capital, Yangon. Some held signs saying We love Obama. Approaching the building, crowds spilled into the street, getting close enough to touch Obama's vehicle.
Later Obama will meet fellow Nobel Peace Prize laureate and opposition leader Aung San Suu Kyi, who led the struggle against military rule.
Obama's trek to Myanmar is meant to highlight what the White House has touted as a major foreign policy achievement -- its success in pushing the country's generals to enact changes that have unfolded with surprising speed over the past year.
But some international human rights group object to the visit, saying Obama is rewarding the government of the former pariah state for a job they regard as incomplete.
Speaking in Thailand on the eve of his visit, Obama denied he was going to offer his endorsement or that his trip was premature. He insisted his intention was to acknowledge that Myanmar, also known as Burma, had opened the door to democratic change but there was still much more to do.
I don't think anybody is under the illusion that Burma's arrived, that they're where they need to be, Obama told a news conference as he began a three-country Asian tour, his first trip abroad since winning a second term.
On the other hand, if we waited to engage until they had achieved a perfect democracy, my suspicion is we'd be waiting an awful long time.
Obama arrives with his attention divided as he faces a mounting conflict in the Gaza Strip and grapples with a looming fiscal crisis at home.
But his Southeast Asian trip, less than two weeks after his re-election, is aimed at showing how serious he is about shifting the U.S. strategic focus eastwards as America winds down wars in Iraq and Afghanistan. The so-called Asia pivot is also meant to counter China's rising influence.
Obama's trip to Burma risks providing an undeserved seal of approval to the military-
dominated government that is still violating human rights, Brad Adams, Asia director at Human Rights Watch, said before the president arrived in the region.
Obama's aides said he was determined to lock in democratic changes already under way, but would also press for further action, including freeing remaining political prisoners and stronger efforts to curb ethnic and sectarian violence.
A senior U.S. official said Obama would announce the resumption of U.S. aid programmes in Myanmar during his visit, anticipating assistance of $170 million in fiscal 2012 and 2013, but this, too, would be dependent on further reforms.
The president will be announcing that the United States is re-establishing a USAID mission in Burma, which has been suspended for many years, the official told reporters in Bangkok, declining to be named.
The United States has softened sanctions and removed a ban on most imports from Myanmar in response to reforms already undertaken, but it has set conditions for the full normalisation of relations, such as the release of all political detainees.
Asked if sanctions could be lifted completely at this stage, a senior administration official insisted they could not. All these things are reversible, he said.
In a move clearly timed to show goodwill, the authorities in Myanmar began to release dozens of political prisoners on Monday, including Myint Aye, arguably the most prominent dissident left in its gulag.
Some 66 prisoners will be freed, two-thirds of them dissidents, according to activists and prison officials.
The government will also let the International Committee of the Red Cross resume prisoner visits, according to a statement late on Sunday, and the authorities plan to devise a transparent mechanism to review remaining prisoner cases of concern by the end of December 2012.
In a speech to be given at Yangon University to an audience that will include several high-profile former prisoners, Obama will stress the rule of law and allude to the need to amend a constitution that still gives a great role in politics to the military, including a quarter of the seats in parliament.
America may have the strongest military in the world, but it must submit to civilian control. As President and Commander-in-Chief, I cannot just impose my will on our Congress, even though sometimes I wish I could, he will say.
He looks forward to a future where national security is strengthened by a military that serves under civilians, and a constitution guarantees that only those who are elected by the people may govern.
Violence between majority Buddhists and the Rohingya Muslim minority in western Myanmar is a top concern, and Obama's aides said he would address the issue directly with Myanmar's leaders.
Myanmar considers the Rohingya Muslims to be illegal immigrants from neighbouring Bangladesh and does not recognise them as citizens. A Reuters investigation into the wave of sectarian assaults painted a picture of organised attacks against the Muslim community.
At least 167 people were killed in two periods of violence in Rakhine state in June and October this year.
Obama did not refer to this in the copy of his speech released to media ahead of delivery, but he will recall the sometimes violent history of the United States, its civil war and segregation, and say hatred could recede with time.
I stand before you today as president of the most powerful nation on Earth, with a heritage that would have once denied me the right to vote. So I believe deeply that this country can transcend its differences, and that every human being within these borders is a part of your nation's story, he will say.
Thein Sein, in a letter to U.N. Secretary-General Ban Ki-moon last week, promised to tackle the root causes of the problem, the United Nations said.
Despite human rights concerns, the White House sees Myanmar as a legacy-building success story of Obama's policy of seeking engagement with U.S. enemies, a strategy that has made little progress with countries such as Iran and North Korea.
Obama's visit to Myanmar, sandwiched between stops in Thailand and Cambodia, also fits the administration's strategy of trying to lure China's neighbours out of Beijing's orbit.