Obama says eliminating multiple legs of travel to get from one place to the other would be a boon for business and tourism.
Kenya's $1 billion tourism industry has suffered in the wake of mass assaults carried out in recent years by the al-Shabab extremist group, which is based across the border in Somalia.
Obama says the U.S. Transportation and Homeland Security departments are working with Kenyan officials on the protocols and security issues that must be settled before direct flights can begin.
He declined to say how soon that might happen, but said progress is being made.
And Obama is warning that corruption may be the biggest impediment to Kenya's growth and opportunities in the future.
Obama was speaking in a joint news conference in Nairobi with Kenyan President Uhuru Kenyatta. He says he believes Kenyatta is serious about going after corruption.
Obama says it's a basic issue of math for international businesses that are concerned about their profit margins. He says companies will be concerned about doing business in Kenya if 5 percent or 10 percent of the cost of investing is being diverted due to corruption.
Obama says the U.S. has seen "all kinds of corruption" in the past. But he says the U.S. over time has showed that when people decide it's a priority to stop it, corruption can be stopped.
He says it's critical to go after corruption at the highest level of government and not just at lower levels.