The Queen greeted the US President and the first lady privately before the other G20 leaders arrived at the Palace to join the royal reception.
foreign affairs editor Tim Marshall said the one-on-one meeting revealed that the Queen was particularly interested to meet the new US leader.
"The Queen wants to see him as much as the thousand or so people out here," he said, referring to the crowd that had gathered to see Mr Obama arrive.
"She is also fascinated by this man," he said.
Mr Obama is the eleventh American president to meet Elizabeth II.
Meeting her visitors inside the palace, the Queen smiled warmly as she shook hands with Mrs Obama while their husbands looked on.
The foursome chatted briefly in front of photographers, who were allowed to record the initial moments of the meeting.
A Palace spokesman said the Obamas presented the Queen with a personalised iPod containing a video of her visit to Virginia, Washington, in 2007.
In return, the royal couple gave them a silver-framed, signed photograph of themselves.
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