"For all the young people in this room, and those who are watching, know that this country belongs to you, to all of you, from every background and walk of life," she said.
"Do not ever let anyone make you feel like you don't matter. Or like you don't have a place in our American story, because you do and you have a right to be exactly who you are," she added. "But I also want to be very clear. This right isn't just handed to you. This right has to be earned every single day. You cannot take your freedoms for granted."
The first lady also implored young people to be "informed and engaged" as citizens.
"That's my final message to young people as first lady. It is simple," she said. "I want our young people to know that they matter, that they belong. So don't be afraid. Be determined. Be hopeful. Be empowered."
Obama had opened her remarks by officially welcoming visitors to the White House for the first time. She thanked Education Secretary John King and his predecessor, Arne Duncan, and recognized other attendees for "using their star power to inspire our young people" before thanking members of her staff.
"These individuals, they are brilliant. They are creative. They have worked miracles with hardly any staff or budget to speak of, which is how we roll in the first lady's office," she said. "And I am so proud and so grateful to you all for everything that you've done."
The first lady went on to discuss her work to promote higher education.
"We wanted to change the conversation around what it means and what it takes to be a success in this country," she said.
Obama cited her celebration of National College Signing Day, the launch of the "Better Make Way" public awareness campaign to celebrate students and the Obama administration's work to make college more affordable.
"And today the high school graduation rate is at a record high, and more young people than ever before are going to college," she said.
Toward the end of her remarks, Obama adopted a much stronger tone. She spoke directly to various groups, lauding immigrants and religious diversity as "part of a proud American tradition."
"I want our young people to continue to learn and practice those values with pride," she said. "Our glorious diversity, our diversities of faiths and colors and creeds, that is not a threat to who we are. It makes us who we are."
Obama advised young people to get a good education and use it "to build a country worthy of your boundless promise."
"Lead by example with hope, never fear. And know that I will be with you rooting for you and working to support you for the rest of my life," she said.
As she concluded her remarks, she was visibly affected by the emotional moment.
"I want to close today by simply saying thank you," Obama said. "Thank you for everything you do for our kids, and for our country. Being your first lady has been the greatest honor of my life, and I hope I've made you proud."
Watch the conclusion of her remarks below: