Barack Obama today became the first serving US president to visit Burma.
Mr Obama, who was greeted by enthusiastic crowds in the former capital, Yangon, met President Thein Sein, a former junta member who has spearheaded reforms since taking office in March 2011.
He also met the opposition leader and fellow Nobel Peace Prize winner Aung San Suu Kyi.
"I've shared with him the fact that I recognise this is just the first steps on what will be a long journey," Mr Obama, with Mr Sein at his side, told reporters after their talks.
"But we think a process of democratic and economic reform here in Myanmar that has been begun by the president is one that can lead to incredible development opportunities," he added, using the country name preferred by the government and former junta, rather than Burma, which is used in the United States.
Mr Sein, speaking in Burmese with an interpreter translating his remarks, responded that the two sides would move forward, "based on mutual trust, respect and understanding".
"During our discussions, we also reached agreement for the development of democracy in Myanmar and for promotion of human rights to be aligned with international standards," he added.
Mr Obama's Southeast Asian trip is aimed at showing how serious he is about shifting the US 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.
The trip to Burma is also intended 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.
Tens of thousands of well-wishers, including children waving US and Burmese flags, had lined Mr Obama's route from the airport, cheering him as he went by.
Mr Obama met Ms Suu Kyi, who led the struggle against military rule and is now a lawmaker, at the lakeside home where she spent years under house arrest.
Addressing reporters afterwards, Ms Suu Kyi thanked Mr Obama for supporting the political reform process.
But, speaking so softly she was barely audible at times, she cautioned that the most difficult time was "when we think that success is in sight".
"Then we have to be very careful that we are not lured by a mirage of success and that we are working towards genuine success for our people," she said.
Mr Obama recalled Ms Suu Kyi's years of captivity and said she was "an icon of democracy who has inspired people not just in this country but around the world".
"Today marks the next step in a new chapter between the United States and Burma," he said. Before he left, the two embraced and he kissed her on the cheek.
Earlier, Mr Obama made an unscheduled stop at the landmark Shwedagon Pagoda, where he, Secretary of State Hillary Clinton and their entire entourage, secret service agents included, went barefoot up the giant stone staircase.
The US has softened sanctions and removed a ban on most imports from Burma in response to reforms already undertaken, but it has set conditions for the full normalisation of relations, including efforts to end ethnic conflict.
Some human rights groups had objected to the visit to Burma, saying Mr Obama was rewarding the government of the former pariah state for a job that was incomplete.
Speaking in Thailand on the eve of his visit, Mr Obama denied he was going to offer his "endorsement" or that his trip was premature.
Aides said Mr Obama was determined to "lock in" the democratic changes under way in Myanmar but would press for further action, including the freeing of all political prisoners.
A senior US official said Mr Obama would announce the resumption of US aid programmes in Burma during his visit, anticipating assistance of $170 million in fiscal 2012 and 2013, but this, too, would be dependent on further reforms.
In a move clearly timed to show goodwill, the authorities began to release dozens more political detainees this morning, including Myint Aye, arguably the most prominent dissident left in its gulag.
Despite human rights concerns, the White House sees Burma as a legacy-building success story of Mr Obama's policy of seeking engagement with US enemies.