BP says its operation to pump mud into a breached Gulf of Mexico oil well to try to stem the flow of oil caused by a rig explosion is going to plan.
The US government is backing the "top kill" procedure, which has never been tried at such a depth.
BP is under intense pressure to succeed after previous attempts to stem the leak failed.
President Obama is expected to announce tough new drilling regulations after a key report into the spill is released.
The preliminary report from the US Department of the Interior will focus on lessons to be learned from the disaster.
Mr Obama is expected to order tighter safeguards for offshore drilling and to extend a ban on new permits for drilling in the Arctic.
On Friday he will make his second visit to the Gulf of Mexico region.
A BP official said he believed mud, not oil, was exiting the well's ruptured pipe six hours after the work began.
"What you've been observing coming out of the top of that riser is most likely mud," BP Plc chief operating officer Doug Suttles told reporters in Houston.
"We can't fully confirm that because we can't sample it. And the way we know we've been successful is it stops flowing."
Company officials say it could be a couple of days before they know whether the "top kill" operation has worked.
Thousands of barrels of oil have been spewing into the Gulf every day since the accident on 20 April.
Mud will continue to be pumped into the well for hours, spokesman Steve Rinehart said.
"The procedure is intended to stem the flow of oil and gas and ultimately kill the well by injecting heavy drilling fluids through the blowout preventer on the seabed, down into the well," a BP statement said.
If the oil flow is successfully capped, engineers will follow up with cement to seal the well permanently.
BP Chief Executive Tony Hayward has put the operation's chance of success at 60-70%.
The procedure began at 1300 local time (1800 GMT), shortly after federal officials approved the plan.
Officials say the method has been used before in other areas of the world, but not at the depths required to stem the oil from the Deepwater Horizon rig.
There is a risk a weak spot in the blowout preventer that sits on top of the well could breach under the pressure, causing a brand new leak at the site 50 miles (80km) off the Louisiana coast.
Speaking in California on Wednesday, US President Barack Obama said his administration would commit all resources necessary to stop the flow of oil into the sea.
"If it's successful - and there are no guarantees - it should greatly reduce or eliminate the flow of oil now streaming into the Gulf from the seafloor. And if it's not, there are other approaches that may be viable," he said.
Mr Obama said the "heartbreaking" oil spill underscored the need to find alternative energy sources.
"We will not rest until this well is shut, the environment is repaired and the clean-up is complete," he added.
'Series of failures'
London-based BP has acknowledged that a series of failures occurred on the Deepwater Horizon oil rig in the hours before the explosion that killed 11 workers and triggered the spill that has so far spewed at least 7 million gallons (26.5 million litres) into the Gulf.
Two leading US congressmen have meanwhile been briefed on thousands of BP documents relating to the accident.
In a memo, Representatives Henry Waxman and Bart Stupak say the explosion was preceded by several warning signs - including abnormal pressure readings and failures in some functions of the blowout preventer - but action appears to have been taken too late.
Questions have been raised over whether proper procedures were followed.
Speaking on US television on Wednesday, Mr Hayward said: "What we're seeing here is a whole series of failures. We've identified... at least seven.
"It's very clear that much more needs to be put in place to deal with this situation should it ever occur again."
He added: "It's clear that this will be a transforming event in the history of deep water exploration."