The two hailed the relationship between their nations as the cornerstone of efforts to promote peace and prosperity around the world. Monday night, the two leaders had dinner at a Washington D.C. restaurant.
The president greeted Merkel as she arrived at the White House Tuesday morning. Dozens of schoolchildren waving U.S. and German flags were among the crowd gathered on the South Lawn for the elaborate arrival ceremony.
Obama said Merkel's visit reaffirmed the "indispensable" bond between the U.S. and Germany.
"Germany, at the heart of Europe, is one of our strongest allies," Obama said. "And Chancellor Merkel is one of my closest global partners."
Merkel's visit is her sixth trip to the United States since Obama took office. The relationship between the two leaders is cordial but not close.
They're expected to meet and tackle a wide range of issues, including NATO operations in Afghanistan and Libya, the Middle East peace process and the world economy.
The president also plans to award Merkel the presidential Medal of Freedom during a formal dinner at the White House.
The Associated Press contributed to this story