The first black president of the United States cut the ribbon to inaugurate the striking 37,000-square-meter bronze-clad edifice before thousands of spectators gathered in the nation's capital to witness the historic opening.
"Beyond the majesty of the building, what makes this occasion so special is the larger story it contains," said Obama - just a few months before he leaves office - at the star-studded public ceremony that included the likes of Stevie Wonder and Oprah Winfrey.
The Smithsonian's 19th and latest addition to its sprawling museum and research complex is the first national museum tasked with documenting the uncomfortable truths of the country's systematic oppression of black people, while also honoring the integral role of African-American culture.
"A clear-eyed view of history can make us uncomfortable," Obama said. "It is precisely of that discomfort that we learn and grow and harness our collective power to make this nation more perfect. That's the American story that this museum tells."
After Obama declared the museum "open to the world," it was she - stooped in stature but smiling broadly - who tugged on a rope to ring an antique bell from an historic black church, sealing the inauguration.
"I feel a sense of pride and a sense of humbleness because of all the sacrifices that so many people made to make this happen," said audience member Karmello Colman, who trekked halfway across the country for the ceremony from Kansas City, Missouri.
Officials said the chronicling of slavery and freedom are the centerpiece of the new museum.
The exhibits include such items as a slave cabin from South Carolina, a bill of sale for a 16-year-old girl for USD 600, shackles used on slaves and a copy of the Emancipation Proclamation.
There is also an exhibition focusing on the fight against segregation, which discusses the era from end of Reconstruction through the Civil Rights Movement.
A separate section examines the Civil Rights Movement, the Black Power era of the 1960s and 1970s and other activism remembering many activists, including Dr Martin Luther King.
There are also many iconic items celebrating the achievements in sports, music, television and film including Michael Jackson's fedora hat worn during his 1984 "Victory Tour," boxer Muhammad Ali's headgear, musician Chuck Berry's Cadillac and baseball star Jackie Robinson's bat.
One exhibit also honours the legacy of Obama's election.
"For almost eight years, I have been blessed with the extraordinary honor of serving you in this office," Obama said.
"I imagine holding a little hand of somebody and tell them the stories that are enshrined here," the President added.
