President Obama toured the National Mosque in Kuala Lumpur
President Barack Obama has said the US and Malaysia are at the start of a "new era of partnership", on the second day of his official visit.
Obama was speaking at a state banquet with Malaysian King Abdul Halim Mu'adzam Shah. He is due to meet Prime Minister Najib Razak later.
It is the first such visit by a serving US president for nearly 50 years.
US ties with Malaysia have improved after years of antagonism under former leader Mahathir Mohamad.
Obama, who spent some of his childhood in neighbouring Indonesia, said the US and Malaysia shared the same values and aspirations. He also included a few Malay words in his speech.
"We all share basic human aspirations: to live in dignity and peace, to shape our own destiny, to be able to make a living and work hard and support a family, and most of all to leave the next generation something better than was left to us," he said.
"These are aspirations that I believe illuminate a new era of partnership, between the United States and Malaysia."
The BBC's Jennifer Pak in Kuala Lumpur says the US president will have a more difficult task selling his idea of a proposed trans-Pacific trade deal intended to counter China's growing economic influence in the region.
Obama arrived in Malaysia on Saturday following stops in Japan and South Korea and ahead of a visit to the Philippines.
On Sunday morning - in hot and muggy weather - he visited the National Mosque of Malaysia in black socks, removing his shoes in keeping with protocol, and stopped for a few moments in a prayer room with his head bowed.
Talks with Prime Minister Najib Razak are expected to focus on security co-operation and the sharing of intelligence.
Obama will end his visit by speaking to young people from around Southeast Asia at a town hall meeting.
His visit to the region comes at a tense time as China's assertive stance in territorial disputes has its smaller neighbours on edge.
Ahead of his visit, Malaysia's government-controlled newspapers printed the US flag on their front pages, along with the words "Welcome, President".
However, some analysts say it has taken Obama too long to visit the country, especially as he lived in the region as a child.