With First Lady Michelle Obama, he is visiting the village of Moneygall, Co Offaly, home of one of his relatives.
Security is tight during the trip following the US raid that killed Osama Bin Laden in Pakistan three weeks ago.
After Ireland, the president will also visit the UK, France and Poland. In France, he will attend a meeting of the Group of Eight (G8) major world powers.
Upon arriving in Dublin, President Obama met Irish President Mary McAleese, and also held talks with Taoiseach Enda Kenny.
In Moneygall, a huge security operation has been put in place.
The village, which only has 300 residents, has covered its main street in stars and stripes and prepared a warm welcome for President Obama in the village pub.
Later when he returns to Dublin, President Obama will deliver an open-air speech on College Green.
'Special relationship'
On Tuesday, Mr Obama flies to London for a three-day state visit to the UK.
He and his wife will stay at Buckingham Palace as guests of the Queen.
Mr Obama will hold talks with Prime Minister David Cameron at 10 Downing Street with the Nato operation in Libya expected to be high on the agenda.
Mr Obama will also address both houses of the UK parliament at Westminster Hall.
It is rare for a foreign head of state to make such an address in Westminster Hall - usually this is reserved for British monarchs.
The White House has said the visit will be an important opportunity for Mr Obama to reaffirm the strength of the "special relationship".
"The US and UK of course enjoy a special relationship," said deputy national security adviser Ben Rhodes.
"There is no closer ally for the US in the world than the UK. We are in absolute alignment with the British on a range of core international security interests and, of course, our deeply shared set of values that have tied us together for many decades."
On Thursday Mr Obama heads to Deauville, France, for the G8 summit where he will meet French President Nicolas Sarkozy, Russian President Dmitry Medvedev and Japanese Prime Minister Naoto Kan.
On Friday, the US leader travels on to Poland to discuss proposals for a US missile shield in Europe which the Poles will partly host.
Security for the tour is expected to be unprecedented, following the US raid that killed al-Qaeda leader Osama Bin Laden in Pakistan earlier this month.
Mr Obama said he would order a similar operation if another militant leader was found in Pakistan.
The killing of Bin Laden in a Pakistani garrison town strained ties between the two allies.
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