His visit thrusts U.S. strategy in Iraq and troop levels to the centre of the November election race between the first-term senator from Illinois and Republican candidate John McCain. There are more than 140,000 U.S. soldiers in Iraq.
Obama has called for the removal of U.S. combat troops within 16 months of taking office should he win the election.
Iraqiya state television and witnesses said Obama met Prime Minister Nuri al-Maliki in Baghdad. There were no further details on Obama's visit, which has been shrouded in secrecy for security reasons.
Obama visited Afghanistan over the weekend, the other big foreign policy challenge the next American president will face. He called the situation in Afghanistan "precarious and urgent" and said Washington should start planning to transfer more troops there from Iraq.
Maliki suggested earlier this month setting a timetable for U.S. troops to leave Iraq but has given no dates.
Obama has welcomed Maliki's suggestion but some Iraqis insist that the army and police cannot go it alone and that a premature withdrawal of U.S. troops could open the door to the sort of violence that nearly tore Iraq apart not so long ago.
On Sunday the Iraqi government denied Maliki told a German magazine in an interview that he backed Obama's plan to withdraw combat troops within 16 months. The government said Maliki's remarks to Der Spiegel were translated incorrectly.
McCain has attacked Obama for not visiting Iraq recently to get a first-hand look at conditions.
The Republican candidate has been to Iraq eight times while Obama's only other trip was in January 2006, a month before militants blew up a revered Shiite shrine in Samarra in an attack that plunged Iraq into vicious sectarian fighting.
The U.S. embassy said Obama, who is visiting Iraq as part of a U.S. congressional delegation, would also meet U.S. military commanders and American troops.
Commanders are likely to tell Obama that security gains are fragile and could be jeopardised by a hasty troop withdrawal.
Obama, trying to boost his foreign policy credentials, will travel to other countries in the Middle East and visit major powers in Europe this week.
He has scheduled no news conferences in Iraq.
OBAMA SAYS WANTS TO END THE WAR
Obama courted controversy on July 3 when he said he might "refine" his views on withdrawing combat troops from Iraq within 16 months but later said his stance had been unchanged for more than a year and that he intended "to end this war".
McCain says the U.S. troop buildup last year helped boost stability in Iraq and has criticised the Democrat's vow to order a quick withdrawal as "reckless".
But the dramatic reduction in violence has led Baghdad to become increasingly assertive about its own security capabilities.
Indeed, Maliki and President George W. Bush agreed last week to set a "time horizon" for reducing American forces in Iraq.
It was the closest the Bush administration has come to acknowledging the need for a timeframe for U.S. troop cuts. Bush has long opposed deadlines for troop withdrawals.
In a speech last Tuesday, Obama said a "single-minded" focus on Iraq was distracting the United States from other threats, and he promised to shift resources to fighting al Qaeda and the Taliban in Afghanistan.
Bush ordered 30,000 extra troops to Iraq in early 2007 to try to drag the country back from the brink of all-out war between majority Shiites and minority Sunni Arabs.
The last of those reinforcements depart this week, still leaving 140,000 U.S. soldiers in the country, about the same number as when Bush ordered the so-called surge.
Obama has criticized McCain and Bush for making Iraq the centre of the battle against terrorism and said he would pursue a new national security strategy to rebuild foreign alliances and regain global goodwill destroyed by the war.
