Speaking at his final nuclear security summit, Obama warned of "madmen" that could inflict damage on hundreds of thousands of innocent people using plutonium the size of an apple.
"The danger of a terrorist group obtaining and using a nuclear weapon is one of the greatest threats to global security," Obama said.
He added that the threat of nuclear terrorism has decreased since six years ago, with enough material for more than 150 nuclear weapons having been secured or removed.
"Individuals involved in the attacks in Paris and Brussels video taped a senior manager who works at a Belgian nuclear facility," he said.
"Isil has already used chemical weapons, including mustard gas in Syria and Iraq - there is no doubt that if these madmen ever got their hands on a nuclear bomb or nuclear material they most certainly would use it to kill as many innocent people as possible.
"And that’s why our work here remains so critical. The single most effective defence against nuclear terrorism is fully securing this material so it doesn’t fall into the wrong hands in the first place," Obama added.
Obama also asked the world leaders that gathered for the summit to plot a response to a hypothetical attack by a global terrorist network. In the scenario, the terrorists were about to launch a "dirty bomb" attack on civilians using overhead drones.
The president also questioned Donald Trump's fitness for office, given statements that Trump made that he would be open to Japan and South Korea acquiring nuclear weapons to deter North Korea. Trump did not rule out using nuclear weapons in Europe in the event of a military conflict.