After a meeting in Belfast's Stormont Castle with the region's First Minister Peter Robinson and Deputy First Minister Martin McGuinness, Mrs Clinton hailed the progress already made in the last 15 years as a model for reconciliation around the world.
But she said President Barack Obama's administration stood ready to help in any way to overcome the outstanding issues confronting the powersharing administration.
Foremost among those is the devolution of policing and justice powers from Westminster.
The politically sensitive move was understood to be high on the agenda during Mrs Clinton's hour long talks with the Democratic Unionist and Sinn Fein representatives.
"There's no doubt in anyone's mind that Northern Ireland has come a long way," she said afterwards.
"Old enemies are working together to build a stable, prosperous future and I've seen first hand how you have become a model for conflict resolution and reconciliation around the world.
"I hear that on my travels: people who are determined to choose peace and progress over violence look toward you."
She added: "The United States stands ready to help in any way we can, our peoples are bound together by both historic and ancestral ties nurtured by friendship and partnerships. Both my husband and I feel a special bond with this land and as Secretary of State I am committed to continue to offer a hand of friendship and partnership."
Republicans and unionists have yet to finalise an agreement on devolving policing and justice powers from Westminster to the Stormont Assembly, but lengthy talks with Prime Minister Gordon Brown last week carved out a financial blueprint for the move.
The US Secretary of State is making her seventh visit to Northern Ireland since she first arrived as First Lady with her husband President Bill Clinton to famously boost the fledgling search for peace in the 1990s.
US Ambassador in London Louis Susman and the US consul to Northern Ireland, Kamala Lakhdir, accompanied her.
After the meeting at the First and Deputy First Ministers' offices in Stormont Castle, Mrs Clinton travelled the short distance to the region's legislative assembly at Parliament Buildings to address members.
From there she is due to attend engagements at Queen's University and Belfast City Hall.
Mrs Clinton addressed a packed Northern Ireland Assembly watched by guests including nationalist SDLP peace process founder John Hume.
She said Northern Ireland stood as an example to the world and that the US would be behind the country every step of the way to devolution of policing and justice.
The Secretary of State added that the US would not meddle in the issue but said that, with grit and resolve, there could be progress.
"Time and time the leadership that each of you can provide, the torn fabric of society will be woven together stitch by stitch, choice by choice," she said.
"The people of Northern Ireland have given this Assembly a powerful mandate and you in turn have accepted that responsibility to summon the highest qualities of leadership and to repay the faith that people have invested in you."
With the threat from dissident republican gunmen still high, the Secretary of State said continued investment relied on politicians doing their job to provide better security.
And she added that there were dissidents from the peace process seeking to undermine the Assembly and Government.
Welcoming Mrs Clinton's comments, both Mr Robinson and Mr McGuinness reiterated their determination to make power-sharing work.
"We have made real progress in setting up our administration," said DUP leader Mr Robinson.
"We have made more decisions in our Executive than our predecessors did and we have done it in a shorter period of time.
"Of course there are difficulties but I believe we are committed to making it work, we are committed to the long haul, we are committed to overcoming the problems we will face and we are very grateful for the assistance we have had from the United States, from this and from particularly the two previous administrations."
Mr McGuinness said Mrs Clinton had played a vital role in securing the peace Northern Ireland now enjoyed.
"Hillary Clinton has been a true friend to all of us going back over 15 years, and her continued intellectual and emotional and political engagement with us is something that has been to our enormous benefit over all of that time," said the Sinn Fein representative.
"I believe that we are in a society moving forward to a destination of equality and partnership and you have been with us every step of the way, as have the two previous administrations.
"We do face, as Peter has said, huge challenges in the times ahead. Yes, we have had many accomplishments over the course of recent times and this is not a time for complacency: this is a time for recognising the great achievements but facing up to the challenges that clearly face us."
The prospect of future investment by US companies was also discussed during the meeting, with Mrs Clinton later stressing the importance of political stability to American business leaders thinking of setting up in the region.
In the Assembly she also paid tribute to former DUP First Minister Ian Paisley who led his party into power-sharing with Sinn Fein.
"Please know that the Obama Administration and the US is committed to helping you finish your journey to put behind you the long years of division and conflict, to build confidence and trust across all political communities and political parties."
She said it was not her business to interfere.
"Today Northern Ireland stands as an example to the world of how even the staunchest adversaries can overcome difference to work together for the greater good so I encourage you to move forward with the same unstoppable spirit of grit and resolve," she added.
She said the best guard against dissidents dragging people back was lasting devolution.
"Moving together will leave them stranded on the wrong side of history," she said.
The former senator said there had been considerable effort in recent weeks between the political parties in Northern Ireland to make progress on policing and justice.
"There have been many moments in Northern Ireland's peace journey when progress seemed difficult, when every road forward was blocked and there seemed to be nowhere to go but you have always found a way to do what you believed was right for the people of Northern Ireland," she added.
She said as a true friend of Northern Ireland, her first visit was in 1995, she hoped the process of devolution would be completed.
"The Obama administration and the United States is committed to helping you on your journey," she added.
"But when it comes to the important issue of the devolution of policing and justice, that is a decision for this Assembly to take."
Mrs Clinton said Northern Ireland was an example to the world.
She warned that there was a choice between a past which could not be changed and commitment to a different future which can be shaped.
"I am confident that together you can move forward and harness the exciting human and economic potential that Northern Ireland has to offer," she added.
"The promise of the Good Friday Agreement and the St Andrews Agreement is not yet fully realised and Northern Ireland is now facing a new challenge with the global economic downturn which threatens some of the gains which you have made in the past.
"The value of peace isn't only the absence of violence - it is also the presence of new opportunities for jobs, education, healthcare and political participation.
"It is critical in the moment of economic turmoil to protect the progress you have already achieved and to build to ensure that your people continue to enjoy the rewards of peace and embrace it for the long term."
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