The speech centered on the values of the democratic system despite challenges he perceives from his successor, Donald Trump, though he was only named once.
"Democracy can buckle when it gives in to fear," he said.
"You have made me proud, and you have made the country proud," he said of his wife as he at one point wiped back tears.
On believing in America
"Yes, we can. Yes, we did. Yes, we can," he said, repeating his catchphrase from his 2008 campaign as he concluded his address.
On the lack of common ground
"It's not just dishonest, this selective sorting of the facts; it's self-defeating," he said. "Because as my mom used to tell me, reality has a way of catching up with you."
On race in America
"After my election, there was talk of a post-racial America," Obama said. "Such a vision, however well-intended, was never realistic."
On American exceptionalism
"Not that our nation has been flawless from the start, but that we have shown the capacity to change, and make life better for those who follow."
"For every two steps forward, it often feels we take one step back," he said. "But the long sweep of America has been defined by forward motion, a constant widening of our founding creed to embrace all, and not just some."
"Only if all of us, regardless of our party affiliation or particular interest, help restore the sense of common purpose that we so badly need right now," he said.
On political discourse
"We weaken those ties when we allow our political dialogue to become so corrosive that people of good character aren't even willing to enter into public service; so coarse with rancor that Americans with whom we disagree are not just misguided, but as malevolent," he said.
"We weaken those ties when we define some of us as more American than others; when we write off the whole system as inevitably corrupt, and when we sit back and blame the leaders we elect without examining our own role in electing them."
On "four more years" chants
"I can't do that," he said when the crowd of Obama fans begged him to run again, which is not allowed by the Constitution.