During talks at the White House, the two leaders discussed international security, trade and the global economy.
It's the second and final day of Malcolm Turnbull's first state visit to the US as Prime Minister.
At the centre of discussions between the two leaders was the battle against the self-proclaimed Islamic State, also known as ISIL or Daesh.
With last week's Jakarta attacks fresh in their minds, Barack Obama and Malcolm Turnbull were united on the need to boost cooperation to defeat extremism.
"The recent attack in Jakarta, that appears to have been ISIL-inspired, is a reminder that southeast Asia has, generally, done a very effective job fighting against extremism but it is an area that we have to pay attention to and watch," said President Obama.
Mr Turnbull agreed, saying: "We have to constantly lift our game in the way we engage with and tackle these extremists, particularly ISIL, but there are many others."
Direct from meeting troops in Iraq and Afghanistan, Prime Minister Turnbull recognised the importance of a strong US-Australia alliance.
"I've learnt firsthand from our people and yours and indeed from the Government of Iraq, from its Prime Minister, how Australians and Americans working together were able to support the Iraqi security forces in the retaking of Ramadi."
President Obama took the opportunity to point out that Australia is the second largest contributor of military forces in the battle against IS, praising its commitment to the fight.
But he agreed more needs to be done to counter violent extremism, which he likened to a cancer.
"How we can continue to focus on what we call the 'parent tumour' of ISIL in Iraq and Syria, and the important work that we have to do together in countering violent extremism, generally."
Focus of the talks soon shifted to the global economy.
And while it's been revealed that in 2015 China's economic growth rate in 2015 was at its slowest in 25 years, the discussions were reportedly optimistic.
Referring to China, Mr Turnbull delivered a message of encouragement.
"My point about China simply is this: yes, you are seeing an adjustment and these adjustments are never as smooth as you would like. But overwelmingly this is a change that had to happen, it was always going to happen. The can has been kicked along the road (decisions have been delayed) for political reasons and circumstances for a long time. And as that adjustment occurs I have no doubt it will be good for China and the rest of the world."
The Prime Minister took the opportunity to promote the Trans-Pacific Partnership, or TPP.
The regional deal involving 12 countries is controversial in the US and unlikely to pass Congress before the November presidential poll.
Mr Turnbull told a US Chamber of Commerce gathering he's urging congressional leaders to back the deal.
"The TPP is much more than a trade deal. The prosperity of the world and security of the world was founded on the peace and order in the Asia Pacific which has been delivered, underwritten, by the United States and its allies, including Australia."
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