Obama used the once divided city's rebirth as a metaphor for progress, as he stood on the east side of the route of the Berlin Wall, and warned the "complacent" West that history did not stop with its Cold War victory.
"The wall belongs to history. But we have history to make as well," a sweat-streaked Obama said to an invited crowd of 6,000 people standing before the majestic landmark in sweltering summer weather.
The US leader called on Russia to agree to bring the number of strategic nuclear weapons held by the former Cold War foes down to around 1,000 and to also cut stocks of tactical nuclear arms.
"I've determined that we can ensure the security of America and our allies and maintain a strong deterrent while reducing our strategic weapons by up to one-third," Obama said.
"These are steps we can take to create a world of peace and justice," he said, seeking to cement nuclear arms reductions as a key piece of his legacy.
It remains unclear whether Russian President Vladimir Putin, with whom Obama had a frosty meeting at the G8 summit in Northern Ireland on Monday, will agree to such substantial weapons cuts.
Russian Deputy Prime Minister Dmitry Rogozin however poured cold water on the proposal.
"How can we take seriously this idea about cuts in strategic nuclear potential while the United States is developing its potential to intercept this strategic potential?" he said, according Russia's Itar-TASS news agency.
A Kremlin spokesman said earlier that Russia had told the United States it wanted other nuclear armed states to commit to reductions.
Obama sought to conjure up the echoes of speeches by predecessors John F. Kennedy and Ronald Reagan, though his speech lacked the historic weight and urgency of their Cold War efforts.
Nearly 50 years to the day after Kennedy proclaimed "Ich bin ein Berliner" in Berlin, Obama built his conceit around another quote from the assassinated Democrat's speech -- the idea of "peace with justice".
Obama issued a call for the equality of economic opportunity, gender, sexuality and respect for immigrants and all religious faiths, in a throwback to his own campaign rhetoric in 2008 and 2012.
And he made his firmest vow to date to make good on previous promises to tackle global warming, which have largely been derailed by resistance in the US Congress and by the fear of harming the sluggish US economy.
"Peace with justice means refusing to condemn our children to a harsher, less hospitable planet," Obama said, to applause from the crowd.
"We know we have to do more. And we will do more," Obama said, calling on the world to get to work "before it is too late".
Obama also vowed to do more to help those living in impoverished corners of the globe and those, unlike the citizens of former East Berlin, who are still living under repression, including in the Middle East.
"The heroes that came before us now call to us to live up to those highest ideals to care for the young people that can't find a job in our own countries and the girls who aren't allowed to go to school overseas.
"To be vigilant in extending a hand to those reaching for freedom abroad," Obama said.
His speech though lacked the pomp of the soaring address in Berlin to 200,000 people he gave as a candidate in 2008, when the potential of a new political phenom seemed limitless and his call for change heady.
'At least 50 threats have been averted'
This time, Obama spoke as a somewhat jaded leader, who has battled economic blight for five years, wielded lethal power in the US anti-terror campaign, and theoretically at least has had the power to fix the problems he invoked.
The crowd reaction was enthusiastic, but more tempered than when Obama, riding a wave of hope and change, spoke at Berlin's Victory Column five years ago.
Germans had eagerly awaited the pageantry of Obama's first trip to their capital as president, but his arrival had been preceded by sharp questions about the scope of National Security Agency (NSA) programmes.
Obama, under fire at home and abroad over the snooping, sought to assure Germans that the system was limited in scope and legal during a press conference with German Chancellor Angela Merkel.
"This is not a situation where we are rifling through, you know, the ordinary emails of German citizens or American citizens or French citizens or anyone else," Obama said after meeting Merkel.
He argued that "lives have been saved" because of the use of the surveillance system.
"We know of at least 50 threats that have been averted -- not just in the United States, but in countries around the world, including Germany," he said.
The programmes, which have special resonance in a nation where snooping operations by the communist Stasi secret police are a painful memory, have triggered alarm in Berlin.