Colorado, before putting his name on what he said was "the most sweeping economic recovery package in our history."
The president, who has been warning darkly of economic "disaster" without quick action by the US government, adopted a more hopeful tone as he signed the bill, which may have deep implications for the success of his presidency.
But US stocks plunged on Tuesday as investors worried about whether government action would save the ailing economy, with the Dow Jones Industrial Average down 297.41 points (3.79 per cent) to 7,553.00 at the closing bell.
Obama however said the new law, designed to create or save 3.5 million jobs, to overhaul creaking US infrastructure and to launch a healing wave of consumer spending, was a watershed, less than a month into his presidency.
"I don't want to pretend that today marks the end of our economic problems nor does it constitute all of what we have to do to turn the economy around," Obama said in the city where he vowed to unleash a wave of change in his convention speech in August.
"But today does mark the beginning of the end -- the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs.
"The beginning of what we need to do to provide relief for families worried they won't be able to pay next month's bills.
"The beginning of the first steps to set our economy on a firmer foundation, paving the way to long-term growth and prosperity," the president said.
Obama signed the bill on a wooden desk in the Denver Museum of Nature and Science, under a glass roof allowing shafts of sunlight to filter through, in a metaphoric antidote to dark days of economic gloom.
The museum has a pioneering solar plant, an example of new generation energy sources funded in the bill that Obama says will retool the US economy.
Even as he headed west to enact the historic law, passed at lightning pace for a new president, a clutch of other threats crowded Obama's agenda, including the reeling auto industry and the mortgage crisis.
The White House meanwhile released state-by-state details on what it said would be the impact of the stimulus, known as the "American Recovery and Reinvestment Act."
The figures also included detailed estimates of how many jobs the plan would create in each congressional district, an apparent attempt to pressure Republican House of Representative members who unanimously opposed the bill.
The US unemployment rate rocketed to 7.6 per cent in January, its highest rate in 16 years, and Obama aides warned that it could hit double figures without urgent government action.
Roughly one-third of the stimulus funds will be spent on tax cuts, totaling 286 billion dollars, in an effort to boost consumer spending, a key engine of the world's largest economy.
But a further 120 billion dollars is being allocated to "shovel-ready" infrastructure projects, in such sectors as transportation, road-building, improving the power grid and renewable energy installations.
But there has been Republican anger at the size of the package, and the bill was pushed through Congress only after a bruising battle. In addition to the Republican House boycott, only a handful of senators supported it.
"Our nation is in recession, and responsible action is required to help our economy protect and create jobs, this isn't it," House Republican minority leader John Boehner said Tuesday in a statement.
"The flawed bill the President will sign today is a missed opportunity, one for which our children and grandchildren will pay a hefty price.
Obama was Tuesday also learned more about how the auto industry, one of the pillars of the US economy, plans to ride out the economic downturn that has slashed sales and brought the Big Three automakers to their knees.
General Motors and Chrysler reported to the Treasury on their restructuring plans, a condition of a 17.4-billion-dollar auto industry bailout funded by taxpayers.