"It is not the role of any other country to determine Egypt's leaders," Obama said at the White House. "What is clear and I what I indicated tonight to President Mubarak is my belief that an orderly transition must be meaningful, it must be peaceful and it must begin now."
A change in leadership in Cairo has broad implications for the White House, which has spent days carefully avoiding the public appearance of taking sides as Egyptians rallied in the streets against the government.
The day's events, which saw Mubarak vow not to seek re-election, marked "the beginning of a new chapter" for Egypt, Obama said. The president ruled out any option that would allow Mubarak to remain in power.
At the same time, Washington is fearful that so-far largely peaceful demonstrations in Egypt's major cities could turn violent -- since it was clear from immediate reaction to Mubarak's speech that his lingering until September would not appease his restless citizenry.
"It remains to be seen whether this is enough to satisfy the demands of the Egyptian people for change," said Sen. John Kerry, a Massachusetts Democrat and chairman of the Senate Foreign Relations Committee.
Obama spoke to Mubarak after his speech in Cairo, and said it was clear Mubarak understands the status quo is insupportable.
But a power vacuum in the world's largest Arab country also is a danger, and Obama's remarks dwelt firmly on the need for a new era of democratic rights and reforms in Egypt.
Much is at stake for the White House. Mubarak's successor is likely to be far less permissive about Israel than the current president, given a strong anti-Israel sentiment among Egyptian voters.
Last year, Obama tapped Mubarak to serve as intermediary in the Middle East peace process -- an effort that was sidelined but remains a top priority for the administration.
Mubarak also has served as a ballast against Iran and a useful outreach director on Washington's behalf with other Arab countries. Egypt meanwhile is among the top recipients of U.S. foreign aid.
The administration publicly had been toeing a careful line on Egypt -- sympathizing with the demonstrators seeking economic and democratic reforms, but careful to avoid speaking out against Mubarak, who has been an imperfect but important ally.
But as the crisis wore on, special envoy Frank Wisner, a well-regarded former ambassador to Egypt, was sent to urge Mubarak against seeking re-election.
Shortly after, Mubarak told Egyptians that he will step down later this year. But experts on the region predict Mubarak will be forced out sooner.
"Pretty quickly the administration recognized this was an opportunity to fundamentally revisit a relationship that has been stuck in time for 30 years," said Christopher Preble, director of foreign policy studies at the Cato Institute.