The backing from the Hispanic governor is a victory for Senator Obama and could improve his chances of winning over Latino voters who have leaned towards New York Senator Hillary Clinton.
A Clinton adviser dismissed the endorsement as not significant at this stage in the race.
Senator Obama and Mrs Clinton are in a heated battle to represent the Democrats against the presumptive Republican nominee, Senator John McCain of Arizona, in the Nov 4 presidential election to succeed US President George W. Bush.
In an embarrassment to the Bush administration, the State Department on Friday revealed that the passport records of all three major candidates had been improperly viewed by three contract employees and by a regular department staffer.
Secretary of State Condoleezza Rice called Senator Obama, Mrs Clinton and Mr McCain to apologise and the State Department said it was conducting an investigation and would look at how to tighten its systems to prevent such privacy violations.
'It is deeply disturbing, what's happened,' Senator Obama told a news conference.
'When you have not just one but a series of attempts to tap into people's personal records, that's a problem not just for me but for our health in this country and so I expect a full and thorough investigation.'
Mrs Clinton, who was spending the Easter holiday at home off the campaign trail, said in a statement she would follow the probe closely.
The incident revived memories of the political firestorm that erupted in 1992 after State Department officials searched former President Bill Clinton's passport and citizenship files when he was a Democratic presidential candidate.
Helping with Hispanics?
Governor Richardson, who served as US ambassador to the United Nations and energy secretary during the Clinton administration, chose to abandon the former president and his wife, saying it was time for a new generation to lead.
'Your candidacy is a once-in-a-lifetime opportunity for our nation and you are a once-in-a-lifetime leader,' Governor Richardson said as he stood next to Senator Obama in Oregon.
Mrs Clinton and Senator Obama had cultivated Governor Richardson's backing in part because the Hispanic politician could garner support among the Hispanic community, the fastest-growing segment of the electorate and a potentially vital voting bloc.
Governor Richardson praised a speech Senator Obama gave on race earlier this week and said it touched him as a Hispanic. 'This is a man who understands us and who will respect us,' he said in Spanish.
Hispanics largely backed Mrs Clinton in nominating contests on 'Super Tuesday,' with polls showing her winning two-thirds of the Latino vote in several states, and it was unclear whether they might shift to Senator Obama because of Governor Richardson's endorsement.
Mrs Clinton's chief strategist, Mark Penn, on a conference call with reporters, dismissed Governor Richardson's potential impact this far into the race. 'I think that, you know, perhaps the time when he could have been most effective has long since passed,' he said.
'We both have our endorsers, but I don't think that it is a significant endorsement in this environment.' While saying his 'great affection and admiration for Senator Clinton and President Clinton will never waver,' Governor Richardson, 60, added: 'It is now time for a new generation of leadership to lead America forward.'
A skilled negotiator and diplomat, the popular governor has been mentioned as a possible vice presidential candidate or secretary of state in a Democratic administration.
He also is a superdelegate who would have a vote in the nominating contest if neither Senator Obama nor Mrs Clinton win enough delegates during the primaries.
Senator Obama leads Mrs Clinton in the state-by-state contest to amass delegates who will formally select the Democrat to face Republican McCain.
The Arizona senator, who pulled ahead of both Senator Obama and Mrs Clinton in some national polls this week, was finishing up an overseas trip with a Congressional delegation that visited Iraq, Israel, Jordan, France and Britain. -- REUTERS