"We had a wonderful time. It was the first time that we did Bollywood in the State Room here at the White House," she said amidst applause from the audience, which comprised of the of the Indian American Community members and those in the Obama Administration.
Obama has the distinction of appointing the largest number of Indian Americans in any presidential administrations yet.
Wearing a glamorous skirt especially made for the occasion by India-born eminent designer, Naeem Khan also attended the function.
"Of course, as you all know, I think I can dance," Michelle said in an apparent reference to her dance in Mumbai three years ago when she observed Diwali.
"But not as good as they can dance," she said referring to the expert dance by members of the Gold Spot Band, the New York-based eminent Indian American band.
"As you know, this holiday is celebrated by members of some of the world's oldest religions not just here in America but across the globe. Diwali is a time for celebration. As Barack and I learned during our visit to India, it's a time to come together with friends and family, often with dancing and good food," she said.