At Vientiane's flag-bedecked Wattay International airport, Clinton was given flowers by girls in traditional purple-silk costumes, kicking off her brief but historic trip.
"It's a pretty big deal for the Laotians, and we will underscore a number of areas that we're working on together," a senior US official said.
These include left over ordnance from the war which ended in 1975, excavating the remains of US soldiers missing in action, and the continuing effects of defoliant Agent Orange, used by the US to try to flush out communist forces.
Clinton, whose four-hour whirlwind trip has been front page news in Laos this week, met with Prime Minister Thongsing Thammavong at his office in an elegant white-columned building with two large elephant statues outside.
The pair had "substantive discussions on the broadening bilateral cooperation", according to a joint statement released after the meeting.
The countries "agreed to improve and further facilitate the accounting operations for American personnel still missing from the Indochina War era" and address the "remaining challenges" of unexploded ordnance, the statement said.
They also discussed the forthcoming entry of landlocked Laos, one of the poorest nations in the world with just 6.5 million people and an annual GDP growth rate of seven percent, into the World Trade Organization (WTO).
Clinton is only the second secretary of state to visit Laos after John Foster Dulles, who spent a day in the then-monarchy in 1955. Experts say that all those years ago they had to clear the water buffalo from the Vientiane airport runway so his plane could land.
Clinton was invited to Laos by Foreign Minister Thongloun Sisoulith in 2010 who was the first top Laotian official to visit Washington since the Soviet-backed communist rebels swept to power, ousting the monarchy, in 1975.
US relations with Laos, while never severed, were long tense, in part over its campaign against the Hmong hill people who assisted US forces during the Vietnam War.
But the United States established normal trade ties with Laos in 2004 and annual US aid to Laos will be around $30 million in total for 2012, a US embassy official said.
Of that, $9.2 million will be set aside this year for cleaning up unexploded ordnance (UXO). US forces dropped more than two million tons of ordnance on Laos between 1964 and 1973 in some 580,000 bombing missions to cut off North Vietnam supply lines.
As a result, Laos is the most heavily bombed country, per capita, in history. Some 30 percent of the ordnance failed to detonate and all 17 of the country's provinces still suffer from UXO contamination.
According to official figures, there has been a fall in accidents involving UXO from 300 a year to roughly 92 in 2011.
Clinton, who is also visiting a US-funded orthotic and prosthetic centre, discussed "ongoing bilateral cooperation to help resolve the challenges associated with UXO", with Thammavong.
Another of the main thrusts of the trip is talks on controversial plans by Laos to build a massive dam on the Mekong River, which governments and environmentalists warn could have a devastating effect on millions of people.
During regional talks in Bali last year, Clinton called for a moratorium on dam building along the river -- the world's largest inland fishery. Activists say the dam projects could spell disaster for 60 million people who depend on the Mekong waterway.
Human Rights Watch meanwhile pressed Clinton to call for the release of detainees at the Somsanga drug centre, which it claims holds children and the mentally-ill alongside drug addicts.
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