On the eve of his historic inauguration, Mr Obama joined today in honouring slain civil rights leader Martin Luther King, underscoring racial barriers the Illinois Democrat overcame to be elected the first black US president.
Taking time away from preparing for an address he will deliver when he is sworn in on Tuesday, Mr Obama visited wounded troops at a military hospital and issued a call to Americans to remember King by recommitting themselves to public service.
Hundreds of thousands of visitors streamed into Washington for inaugural festivities but the celebration was tempered by the daunting challenges Mr Obama will face - unfinished wars in Iraq and Afghanistan and the worst financial crisis since the Great Depression.
Mr Obama's inauguration, coming back-to-back with Monday's federal holiday honoring King, has added to the deep symbolism of an African-American receiving the keys to the White House, which was built partly with the labour of black slaves.
"Today, we celebrate the life of a preacher who, more than 45 years ago, stood on our national mall in the shadow of Lincoln and shared his dream for our nation," Mr Obama said in a statement.
"Tomorrow, we will come together as one people on the same mall where Dr. King's dream echoes still. As we do, we recognise that here in America, our destinies are inextricably linked. We resolve that as we walk, we must walk together."
In crafting one of the most eagerly anticipated inaugural addresses ever, Mr Obama will try to reassure recession-weary Americans they can rebound from hard times, and he will signal to the world his desire to repair a battered US image.
But Mr Obama, elected on a promise of change after eight years under Republican president George W. Bush, will also be mindful that if he sets expectations too high, he could risk disappointment.
Mr Obama has vowed to spend hundreds of billions of dollars to jolt the economy out of the doldrums, and has said he wants to bring US combat forces out of Iraq within 16 months.
The inauguration of Mr Obama, son of a black father from Kenya and a white mother from Kansas, will mark a milestone in America's turbulent history of race relations.
It will come more than four decades after the height of the civil rights movement led by King, who preached racial harmony and was assassinated in 1968 by a white supremacist.
Mr Obama often invoked King's legacy during his rise from long-shot candidate to his election in November as the country's 44th president.
But Mr Obama also sought during much of the campaign to avoid calling direct attention to race, which remains divisive in US society, and he came to be known to some as a "post-racial" politician.
A record crowd is expected for his inauguration, with a million people likely to fill the National Mall, a vast green surrounded by museums and monuments, and thousands more lined up along a parade route to the White House.
An unprecedented security operation was already under way, including patrols on ground, air and water.
Parties, concerts, shows and seminars marking Mr Obama's inauguration were launched over the weekend and were scheduled to hit full stride on Tuesday.
On taking the oath of office tomorrow, president-elect Barack Mr Obama will inherit a deepening recession, a shattered financial system, a housing-market meltdown and trillion-dollar budget deficits well into the future.
A calm manner, rhetorical gifts and the promise of new ideas all contributed to Mr Obama's rise to the US presidency as Americans put their trust in him to rescue the economy from its worst crisis in decades. Now the public and the financial markets want to see if he can deliver.
Well aware that stemming the economic decline is the primary priority for his first 100 days in office, Mr Obama is diving in.
With only one day to go before he succeeds President George W. Bush, Mr Obama is working with lawmakers to craft an $825 billion fiscal stimulus package and has successfully lobbied for the second $350 billion of a financial rescue fund.
He has promised quick action to reform a dysfunctional Wall Street regulatory system that has been blamed for the subprime mortgage fiasco and a cascade of problems that led to the collapse of once-venerable investment firms including Lehman Brothers.
Mr Obama is trying to dampen some of the expectations, however. In a recent speech he painted a picture of gloom, warning of double-digit unemployment, telling Americans the economic crisis was "unlike any we have seen in our lifetime" and emphasising the problems could not be fixed overnight.
Nonetheless, there are comparisons being made between Mr Obama and former president Franklin Delano Roosevelt, who took office at the depths of the Great Depression and created a mystique around the "first 100 days".
Mr Roosevelt pushed 15 major pieces of legislation through Congress in his initial 100 days as part of the New Deal that created much of the modern US social safety net. Like Roosevelt, Mr Mr Obama has a Democratic majority in Congress and a popular mandate that will lend momentum to his agenda.
Hundreds of thousands of people gathered at the Lincoln Memorial in Washington last night for the opening event of Barack Obama’s presidential inauguration, a star-studded concert celebrating national unity in diversity.
Bono, Beyonce, Jamie Foxx and Tom Hanks were among the artists who performed songs and read texts on the theme “We Are One”.
Mr Bush's term of office is drawing to an end amid two unfinished wars, the US economy deep in recession, the budget deficit about to hit $1 trillion and the image of the United States badly tarnished abroad.
At the White House, Bush administration staffers were packing up while the president kept a low profile.
He had a series of farewell calls with world leaders, including Russian prime minister Vladimir Putin and president Dmitry Medvedev, British prime minister Gordon Brown, Israeli president Shimon Peres, Georgian president Mikheil Saakashvili, South Korean president Lee Myung-bak, Italian prime minister Silvio Berlusconi and Japanese prime minister Taro Aso.
Mr Bush's final official act will be to welcome Mr Obama to the White House before the swearing-in and accompany him there by motorcade to attend the ceremony before flying home to Texas.
Mr Bush leaves office with some of the lowest approval ratings of any modern president and with some historians already saying his tenure will rank among the worst ever.
Reuters