The meeting took place in the papal residence, south of Rome, where Benedict has been living since his resignation.
The two popes, present and past, embraced, prayed and broke bread together.
"It was a moment of great communion in the church," said the Vatican spokesman, the Rev. Federico Lombardi. "The spiritual union of these two people is truly a great gift and a promise of serenity for the church."
Benedict, 85, has been living at the papal retreat in Castel Gandolfo since he stepped down Feb. 28 and became the first pope to resign in 600 years.
Throughout the visit, Benedict made clear that he considered Francis to be pope while Francis made clear he considered his predecessor to be very much a revered brother and equal.
When the two entered the chapel palazzo to pray, Benedict tried to direct Francis to the papal kneeler in the front, but Francis refused.
Taking Benedict's hands and drawing him near, Francis said, "No, we are brothers," Lombardi said. The two used a longer kneeler in the pews and prayed side-by-side, the papal kneeler facing the altar left vacant.
It was a gesture that is becoming routine for Francis: a shunning of the trappings of the papacy in favor of a collegial and simple style that harks back to his Jesuit roots and ministry in the slums of Buenos Aires.
Francis also brought a gift for Benedict, an icon of the Madonna.
"They told me it's the Madonna of Humility," Francis told Benedict. "Let me say one thing: When they told me that, I immediately thought of you, at the many marvelous examples of humility and gentleness that you gave us during your pontificate." Benedict thanked Francis for the gift.
Outside the villa, the main piazza of Castel Gandolfo was packed with well-wishers bearing photos of both popes and chanting "Francesco! Francesco!" But the crowd soon dissipated after Francis' helicopter left 2.5 hours later, without either pope coming to the balcony as many had hoped.
The Vatican downplayed the reunion, with no live coverage by Vatican television, and only a short video and still images released after the meeting. The details of the pair's private talks or lunch were not released.
Vatican experts believe the pair discussed the future of the Catholic Church.
The Associated Press contributed to this report.