"I am here today to release you as my delegates," she said. Loud boos were heard in the room, presumably from Clinton loyalists.
She added, to cheers, "I am not telling you what to do."
Clinton said she herself marked her ballot for Obama Wednesday morning.
"Many other people who sign their ballots will make a different choice," she said. "You are to be given the respect and recognition you have earned as delegates for the Democratic Party."
With the theme Wednesday of "Securing America's Future," many of the Democratic heavyweights who spoke at the convention touted Obama as ready to lead the country in a time of war.
Republicans have stepped up their efforts to paint Obama as an inexperienced celebrity who is "not ready to lead." And the message may be working: The latest ABC News/Washington Post poll showed McCain leading Obama by 2-1 margins as more knowledgeable on world affairs and as better-suited to be commander in chief.
Trying to reverse that, Bill Clinton argued the country needs Obama's ability to inspire people around the world.
"Clearly, the job of the next president is to rebuild the American dream and restore America's standing in the world," he said. "Everything I learned in my eight years as president and in the work I've done since, in America and across the globe, has convinced me that Barack Obama is the man for this job."
Massachusetts Sen. John Kerry, who was attacked by Republicans as a "flip-flopper" when he was the Democratic presidential candidate in 2004, issued a blistering attack on John McCain's positions and judgment on foreign policy and national security.
"Candidate McCain now supports the wartime tax cuts that Sen. McCain once denounced as immoral," Kerry said. "Candidate McCain criticizes Sen. McCain's own climate change bill. Candidate McCain says he would now vote against the immigration bill that Sen. McCain wrote. Are you kidding? Talk about being for it before you're against it.
"Let me tell you, before he ever debates Barack Obama," Kerry added, "John McCain should finish the debate with himself."
Former Secretary of State Madeleine Albright asked why Americans should trust Republicans to safeguard the nation's security.
"We cannot afford four more years like the past eight years -- policies that embolden our enemies, undermine our economy, and place an unfair burden on the heroes of our armed forces," she said. "John McCain asks that we trust Republicans to safeguard our national security -- to which we can only reply: Why would we?
"We need a president who is not wedded to 20th century thinking, who can forge a network of power and principle that will keep America strong and safe in the 21st century," she said.
ABC News' Kate Snow, Matt Jaffe, Jake Tapper, Karen Travers, Teddy Davis, Tahman Bradley, Eloise Harper, Sunlen Miller, and Rick Klein contributed to this report.