Any meeting would occur "at a time and place of my choosing," the likely Democratic presidential nominee told an audience of Cuban-Americans that applauded his remarks.
He said he would maintain the existing trade embargo to use as leverage for winning Democratic change in the Communist island-nation. But he said he would immediately allow "unlimited family travel and remittances to the island. It's time to let Cuban-Americans see their mothers and fathers, their sisters and brothers.
"It's time to let Cuban-American money make their families less dependent upon the Castro regime," he said.
Obama made his remarks as part of his first extended trip through swing-state Florida, beginning a courtship that ordinarily would have occurred much earlier in the year. But the state's Jan. 29 primary date violated Democratic National Committee rules, and the party's presidential hopefuls observed a ban on campaigning.
Obama's campaign billed the speech to the Cuban American National Foundation as a new policy for Latin America.
He accused President Bush's of diplomatic neglect, and allowing a vacuum to develop into which anti-American Venezuelan President Huge Chavez came to power.
"... That is the record, the Bush record in Latin America, that has chosen to embrace," he said.
As for Cuba, he said, "my policy ... will be guided by one word: Libertad."
Obama has been criticized sharply by McCain and other Republicans for having said he would agree to meet in the first year of his administration, without preconditions, with leaders such as Iran's President Ahmadinejad, Castro and the heads of other rogue regimes.
Some prominent Democrats have also disagreed with Obama's position.
"I would," he said when asked in a debate in July 2007. "And the reason is this, that the notion that somehow not talking to countries is punishment to them - which has been the guiding diplomatic principle of this administration - is ridiculous."
Despite his own change, Obama sought to turn the tables on McCain, saying that the Republican's opposition to a no-conditions meeting with Castro amounted to ruling out a "course of action that that could advance the cause of liberty."
He said McCain has been "going around the country talking about how much I want to meet with Raul Castro as if I'm looking for a social gathering. That's never what I've said and John McCain knows it."
The McCain campaign countered that Obama has a "record of weak leadership" on Cuba, saying Obama has voted to curb funding for U.S. broadcasting in Cuba. It also accused him of flip-flopping on ending the U.S. embargo against Cuba.
"Senator Obama's reckless judgment, and his pandering on trade will set back relations between the United States and Latin America for decades. That's not a new day the people of North and South America want to wake up to," said McCain spokesman Tucker Bounds.
Turning his attention to the rest of the region, Obama said, "We can continue as a bystander or we can lead the hemisphere into the 21st century. And when I am president of the United States, we will choose to lead. It's time for a new alliance of the Americas," Obama said.
An Obama administration would increase economic aid to Latin America, work with other nations to reduce drug trafficking and seek cooperation on alternative energy, while also pursuing trade deals that protect U.S. workers, he said.
On the verge of claiming the Democratic nomination, Obama needs to build support among Hispanic voters, both nationally and in the key swing state of Florida. The state's population is 20 percent Hispanic and 16 percent black.
Hispanics have preferred Sen. over Obama by 26 percentage points in Democratic primaries so far, according to exit polls for The Associated Press, eclipsing the 15-percentage point edge by which she has won among white voters. They also seem more staunchly loyal to Clinton than whites: 35 percent of Hispanics have said they would only be satisfied if the New York senator wins the nomination, compared to 29 percent of whites.
Cuban-Americans have traditionally supported Republicans and a hard line against any engagement with Cuba's Communist rulers. But that is changing.
Jorge Mas Santos, son of the Cuban American National Foundation's founder, introduced Obama by calling for a new approach to Cuba, including allowing Americans to send money and make trips back to relatives on the island - two measures Obama supports.
Simply waiting for democratic reforms in Cuba "is not a policy. Ladies and gentlemen, it is surrender," Mas Santos said.
Even before the speech to mark Cuban Independence Day, Florida leaders weren't shy about expressing their differences with Obama.