Taking time away from preparing for an address he will deliver when he is sworn in on Tuesday, Obama visited wounded troops at a military hospital and issued a call to Americans to remember King by recommitting themselves to public service.
Hundreds of thousands of visitors streamed into Washington for inaugural festivities but the celebration was tempered by the daunting challenges Obama will face -- unfinished wars in Iraq and Afghanistan and the worst financial crisis since the Great Depression.
Obama's inauguration, coming back-to-back with Monday's federal holiday honoring King, has added to the deep symbolism of an African-American receiving the keys to the White House, which was built partly with the labor of black slaves.
"Today, we celebrate the life of a preacher who, more than 45 years ago, stood on our national mall in the shadow of Lincoln and shared his dream for our nation," Obama said in a statement.
"Tomorrow, we will come together as one people on the same mall where Dr. King's dream echoes still. As we do, we recognize that here in America, our destinies are inextricably linked. We resolve that as we walk, we must walk together."
In crafting one of the most eagerly awaited inaugural addresses ever, Obama will try to reassure recession-weary Americans they can rebound from hard times, and he will signal to the world his desire to fix a battered US image overseas.
But Obama, elected on a promise of change after eight years under Republican President George W Bush, will also be mindful that if he sets expectations too high, he could risk disappointment.
Obama has vowed to spend hundreds of billions of dollars to jolt the economy out of the doldrums, and has said he wants to bring US combat forces out of Iraq within 16 months.
After rolling up his sleeves to help paint a wall at a shelter for homeless and runaway teenagers, Obama touched on a theme of personal responsibility expected to figure prominently in Tuesday's speech from the US Capitol steps.
"Given the crisis that we're in and the hardships that so many people are going through, we can't allow any idle hands. Everybody's got to be involved," he told reporters.
MILESTONE IN US RACIAL HISTORY
The inauguration of Obama, son of a black father from Kenya and a white mother from Kansas, will mark a milestone in America's turbulent history of race relations.
It will come more than four decades after the height of the civil rights movement led by King, who preached racial harmony and was assassinated in 1968 by a white supremacist.
Obama often invoked King's legacy during his rise from long-shot candidate to his election in November as the country's 44th president.
But Obama also sought during much of the campaign to avoid calling direct attention to race, which remains divisive in U.S. society, and he came to be known to some as a "post-racial" politician.
A record crowd is expected for his inauguration, with a million people likely to fill the National Mall, a vast green surrounded by museums and monuments, and thousands more lined up along a parade route to the White House.
An unprecedented security operation was already under way, including patrols on ground, air and water.
Parties, concerts and seminars marking Obama's inauguration were launched over the weekend and will hit full stride after Tuesday's ceremony, which will be covered by US broadcasters as Americans' version of a royal coronation.
At the White House, Bush administration staffers were packing up while the president kept a low profile.
He had a series of farewell calls with world leaders, including Russian Prime Minister Vladimir Putin and President Dmitry Medvedev, British Prime Minister Gordon Brown, Israeli President Shimon Peres, Georgian President Mikheil Saakashvili, South Korean President Lee Myung-bak, Italian Prime Minister Silvio Berlusconi and Japanese Prime Minister Taro Aso.
Bush's final official act will be to welcome Obama to the White House before the swearing-in and accompany him there by motorcade to attend the ceremony before flying home to Texas.
Bush leaves office with some of the lowest approval ratings of any modern president and with some historians already saying his tenure will rank among the worst ever.