She told lawmakers Thursday night that millions of Americans are praying for the success of the new president, and she was one of them.
She noted that Obama's work is cut out for him. But Palin said if he "governs with the skill, grace and greatness of which he is capable, Alaska's going to be just fine."
It was her first public words about Obama since he took office Tuesday.
Palin was the running mate for Sen. John McCain on the Republican presidential ticket which lost to Obama.
She also expressed gratitude to former President Bush "for keeping the homeland safe, and being a friend to Alaska."