Mr Obama, who flew from Johannesburg to Cape Town today, is paying tribute to the ailing 94-year-old throughout the day.
The president and his family visited Robben Island, where the anti-apartheid leader spent 18 years confined to a tiny cell, including a stop at the lime quarry where Mandela toiled and developed the lung problems that sent him to the hospital for most of this month.
The White House said Mr Obama's guide during the tour was 83-year-old South African politician Ahmed Kathrada, who also was held at the prison for nearly two decades and guided Mr Obama on his 2006 visit to the prison as a US senator.
The president also saw the prison courtyard where Mandela planted grapevines that remain today, and where he and others in the dissident leadership would discuss politics, sneak notes to one another and hide writings.
"On behalf of our family, we're deeply humbled to stand where men of such courage faced down injustice and refused to yield. The world is grateful for the heroes of Robben Island, who remind us that no shackles or cells can match the strength of the human spirit," Mr Obama wrote in the guest book in the courtyard.
During the tour, which took place under sunshine and clear, blue skies, Mr Obama, first lady Michelle Obama and daughters Malia and Sasha took in the expansive view of the quarry, a huge crater with views of the rusty guard tower from where Mandela was watched.
Mr Obama commented on the "hard labour" Mandela endured and asked Kathrada to remind his daughters how long Mandela was in prison.
Michelle Obama asked how often Mandela would work and was told he worked daily. As the family turned to leave, Mr Obama asked Kathrada to tell his daughters how the African National Congress, the South African political party, got started.
After the tour, Mr Obama will visit retired archbishop Desmond Tutu before delivering what the White House has billed as the signature speech of his week-long trip, an address at the University of Cape Town that will be infused with memories of Mandela.
Mr Obama will use the address to unveil the "Power Africa" initiative, which includes an initial seven billion dollar (?4.6bn) investment from the United States over the next five years. Private companies, including General Electric and Symbion Power, are making an additional nine billion dollars (?5.9bn) in commitments with the goal of providing power to millions of Africans crippled by a lack of electricity.
Gayle Smith, Mr Obama's senior director for development and democracy, said more than two-thirds of people living in sub-Saharan Africa do not have electricity, including 85% of those living in rural areas.
"If you want lights so kids can study at night or you can maintain vaccines in a cold chain, you don't have that, so going the extra mile to reach people is more difficult," Smith said.
The US and its private sector partners initially will focus its efforts on six countries: Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania, where Mr Obama will wrap up his trip later this week.
Former President George W Bush, who supports health programmes throughout the continent, will also be in Tanzania next week, and the White House did not rule out the possibility that the two men might meet.
Mr Obama will also highlight US efforts to bolster access to food and health programmess on the continent. His advisers said the president sees reducing the poverty and illness that plague many parts of Africa as an extension of Mandela's example of how change can happen within countries.
The former South African president has been in hospital in critical condition for three weeks. Mr Obama met members of Mandela's family yesterday, but did not visit the anti-apartheid icon, a decision the White House said was in keeping with his family's wishes.
Mr Obama's trip, which opened last week in Senegal, marks his most significant trip to the continent since taking office. His scant personal engagement has come as a disappointment to some in the region, who had high hopes for a man whose father was from Kenya.
The president said he was eager to bring his family with him to Robben island to teach them about Mandela's role in overcoming white racist rule, first as an activist and later as a president who forged a unity government with his former captors.
He told reporters he wanted to "help them to understand not only how those lessons apply to their own lives but also to their responsibilities in the future as citizens of the world, that's a great privilege and a great honour".
Mr Obama will speak at the University of Cape Town nearly 50 years after Robert F. Kennedy delivered his famous "Ripple of Hope" speech from the school. Kennedy spoke in Cape Town two years after Mandela was sentenced to life in prison.
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