Obama joined former presidents Joe Biden and Bill Clinton, along with former vice-president Kamala Harris, at the public event in Chicago on Friday for Jackson, who died in February at age 84.
President Donald Trump did not attend because of his schedule, the White House said.
"Each day, we wake up to some new assault on our democratic institutions, another setback to the idea of the rule of law, an offence to common decency," Obama said.
Obama, other Democratic dignitaries and religious leaders urged hundreds of attendees to honour Jackson, an advocate for voting rights and desegregation, by continuing his fight for equality and justice.
"Each day, we're told by those in high office to fear each other and to turn on each other and that some Americans count more than others and that some don't even count at all," Obama said.
"We see science and expertise denigrated while ignorance and dishonesty and cruelty and corruption are reaping untold rewards."
The memorial at the House of Hope, a 10,000-seat venue on Chicago's South Side, celebrated Jackson with a choir performing gospel songs while attendees stood, clapped and sang along.
As well as the former presidents, former first ladies Jill Biden and Hillary Clinton, who also served as US secretary of state, were present, along with basketball great Isiah Thomas and the Reverend Al Sharpton, a prominent civil rights activist.
Speakers called to continue Jackson's fight for racial equality as the Trump administration curbs diversity programs and targets museum and educational content on slavery that it deems "anti-American".
"We're in a tough spot," Joe Biden said.
"We've got an administration that doesn't share the values that we have."
Memorial events for Jackson began in Chicago last week.
Jackson's body also lay in state in South Carolina, where he was born.
An inspirational orator and longtime Chicagoan, Jackson helped lead the nation's civil rights movement after the 1968 assassination of Martin Luther King Jr.
For more than half a century, Jackson, a two-time presidential candidate, worked to dismantle segregationist systems and broaden political participation for Black Americans and other marginalised communities.
Bill Clinton urged attendees to ask what they could do to match Jackson's accomplishments, while Sharpton criticised efforts to weaken diversity initiatives.
"We've beaten people bigger than Trump," Sharpton said, urging the crowd to "leave here with some Jackson fire in you".
