In a rousing TV address, Mr Clinton formally nominated Mr Obama as the Democratic candidate in what is expected to be a tight race against Republican Mitt Romney.
Immediately after Mr Clinton's speech, delegates at the Democratic National Convention made the nomination official in a state-by-state roll call vote, and Mr Obama's acceptance speech marked the climax of the three-day convention in North Carolina.
Democrats have used their convention to reject Republican claims last week that Mr Obama's devotion to big-government solutions has stifled the US economy and swollen the national deficit.
They said Mr Romney would go back to the economic policies that led to a recession, helping the wealthy while harming the poor and middle class.
Mr Clinton followed through on the theme in his speech, saying: "If you want a 'you're on your own, winner-take-all' society, you should support the Republican ticket. If you want a country of shared prosperity – a 'we're all in this together society' – you should vote for Barack Obama and Joe Biden."
Mr Clinton said Mr Obama has "laid the foundation for a more modern, well-balanced economy".