In a late-night announcement from the White House, Obama said the Al-Qaeda founder was killed by U.S. forces inside Pakistan, in a ground operation outside the capital, Islamabad. Justice had been done, he said.
"The death of bin Laden marks the most significant achievement to date in our nation's effort to defeat Al-Qaeda. Yet his death does not mark the end of our effort. There's no doubt that Al-Qaeda will continue to pursue attacks against us. We must and we will remain vigilant at home and abroad," Obama said.
Bin Laden, who was on top of the U.S. "most-wanted" list, was accused of being behind a number of deadly militant attacks, including the suicide hijack attacks on New York and Washington on September 11, 2001, in which nearly 3,000 people died.
He is also widely believed to have been behind the 1998 bombings of U.S. embassies in Tanzania and Kenya and the 2000 suicide attack against the "USS Cole" in the Yemeni port of Aden.
Despite a $25 million bounty on his head, bin Laden evaded the forces of the United States and its allies for almost a decade.
After the announcement of bin Laden's death, thousands of people gathered in New York City at the site of the World Trade Center. More cheering crowds gathered in Times Square. In Washington, crowds gathered outside the White House chanting "U.S.A., U.S.A." and waving flags.
RFE/RL's correspondent Richard Solash described the scene, saying some people were crying, while others were laughing. "There was absolute jubilation. People screaming, cheering, draped in American flags, lighting up cigars. People scaled the trees right in front of the White House," Solash said.
Afghan President Hamid Karzai said today the killing of bin Laden in Pakistan "proved" to the world that the "the fight against terrorism is not in Afghanistan." Karzai also said the Afghan Taliban should "learn their lesson" and stop fighting.
In Pakistan's first official statement on the operation to kill bin Laden, the Pakistani Foreign Ministry said the raid was a U.S. operation.
Obama said he had been briefed in August 2010 on a possible lead to bin Laden's whereabouts.
Obama said: "I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan."
"And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice," he added.
A small team of U.S. forces took possession of his body after "a firefight" in Abbottabad, about 50 kilometers north of Islamabad, on May 1.
One of the helicopters carrying U.S. forces is said to have crashed, but Obama said U.S. forces suffered no casualties during the operation.
Obama said Pakistani security officials had helped "lead us to bin Laden" and he thanked President Asif Ali Zardari for the cooperation. He also insisted that the United States is not at war with Islam.
"We must also reaffirm that the United States is not and never will be at war with Islam. I've made clear, just as [former] President [George W.] Bush did shortly after 9/11, that our war is not against Islam. Bin Laden was not a Muslim leader, he was a mass murderer of Muslims," Obama said.
"Indeed, Al-Qaeda has slaughtered scores of Muslims in many countries, including our own. So his demise should be welcomed by all who believe in peace and human dignity."