Obama asked the companies, gathered at a meeting of the Grocery Manufacturers Association on Tuesday, to "step it up" and put less fat, salt and sugar in foods.
"We need you not to just tweak around the edges but entirely rethink the products you are offering," she said.
The first lady has talked to schools and nutrition groups across the country in her effort to reduce childhood obesity. This is the first time she has confronted the food companies that make the snacks and junk food that stuff grocery aisles and school vending machines.
The Grocery Manufacturers Association - which counts Kraft Foods Inc., Coca Cola Co. and General Mills Inc. among its members - invited her to speak at its science forum this week and attendees gave her a standing ovation.
Welcoming the first lady and embracing her campaign for healthier kids, launched earlier this year, could have advantages. The industry is positioned to take some blows in the coming year, including a child nutrition bill about to move through Congress that could eliminate junk food in schools, digging into some companies' profits.
The Food and Drug Administration is also beginning to crack down on misleading labeling on food packages, saying some items labeled "healthy" are not, and the Senate last year mulled a tax on soda and other sweetened drinks to help pay for overhauling health care.
That tax did not make it into the health care bill, but it could be seen as an opening shot in a quietly growing effort to target food companies, especially as local, state and federal governments scrounge for revenue in a tight fiscal environment.
Obama said she would like to see less confusing food labels and portion sizes and increased marketing for healthy foods. She urged companies not just to find creative ways to market products as healthy but actually increase nutrients and reduce bad ingredients.
"While decreasing fat is good, don't replace with sugar," she urged. "This needs to be a serious industry wide commitment to provide healthier foods."
Obama's campaign is largely focused on school lunches and vending machines, along with making healthy food more available and encouraging children to exercise more.
Scott Faber, a lobbyist for the grocery association, said the industry is open to working with the government on finding ways to produce healthier foods.
"Consumers are demanding more and more healthy choices," he said. "Our industry will do our part by changing the way we make and market our foods, but government has a big role to play as well."
While introducing Michelle Obama Tuesday, Rick Wolford, chairman and CEO of Del Monte Foods Co. and chairman of the Grocery Manufacturers Association, said it is "a watershed moment in the fight against obesity."
"We are willing to do more and we are willing to go the extra mile," he said.
This approach is a far cry from the fights consumer groups had with food companies a decade ago, said Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest.
"When I first started working on junk food in schools, it was a very contentious issue where we regularly did battle with junk and snack food companies," she said. "Now it's a whole new world, and many of them are supporting updating standards."
Wootan said she believes that embarrassment is in part fueling the companies' push, as more attention has been placed on foods' nutritional values or lack thereof. More uniform federal standards could also be helpful to food companies, she said, as some states and localities are creating their own standards for marketing and making foods.
"When you see the handwriting on the wall, it's time to get on the right side of the issue," Wootan said.
Consumer advocates say they are cautiously optimistic about the industry's involvement, but will wait to see how amenable they are to real change.
"They want to be riding that crest rather than fighting it," said Jeffrey Levi, executive director of the Trust for America's Health, a Washington-based public health research organization. "There is a long ways between saying the right things and doing the right thing."