Obama also jabbed Jay Leno, the comedian headlining the dinner. Obama dinged Leno as "the only person whose ratings fell more than mine."
He said he was glad he spoke before the television host, "because we have all seen what happens when somebody takes the time slot after Leno." Comic Conan O'Brien left NBC after his stint hosting "The Tonight Show" following Leno didn't work out.
He took aim at his own administration too, cracking jokes about Vice President Joe Biden and his chief of staff Rahm Emanuel.
Republicans were also the victims of many Obama punch lines. The president noted Sen. John McCain's claim this year that he was not identified as a maverick. "We all know what happens in Arizona when you don't have ID. ... Adios amigos," Obama quipped, referring to a new law in the state that targets illegal immigration.
He wasn't hesitant to mention the attention-hungry couple who crashed his state dinner last fall. "Odds are that the Salahis are here. There haven't been people that were more unwelcome at a party since Charlie Crist," he said about the Florida governor who decided to defect from the Republican party.
Although his poll numbers are down, Obama said he hears he's popular on Twitter and Facebook. "Or as Sarah Palin call it, the socialized media," he said.
Leno picked up on this joke to take a dig at Obama, saying the president isn't as aloof as some critics say he is. "He loves to socialize - health care, car companies," Leno said, naming a few industries where the Obama administration has intervened.
Obama also acknowledged the problems facing the Gulf coast after the disastrous BP oil spill. He plans to go to the Gulf Coast Sunday for a firsthand assessment on efforts to contain the massive oil spill from an offshore drilling rig.
Among the 3,000 guests on hand included Olympic gold medalist Lindsey Vonn, comedian Chevy Chase, actor Alec Baldwin, comedian Bill Maher, actress Michelle Pfeiffer, actor Dennis Quaid, former Secretary of State Colin Powell, GOP Chairman Michael Steele, New York Mayor Michael Bloomberg, White House senior adviser David Axelrod, the Jonas brothers and pop star Justin Bieber.
Hollywood heavyweights Michael Douglas and Steven Spielberg were seen chatting with Emanuel.
At the dinner, the White House Correspondents' Association introduced students who received college scholarships.
Honored at the dinner were several journalists:
-Ben Feller of The Associated Press and Jake Tapper of ABC News, for winning the Merriman Smith Award for presidential coverage under deadline pressure. Feller won for his coverage of Obama's unexpected late-night visit to Dover Air Force Base to honor fallen soldiers. Tapper won for his story that revealed tax problems of former Sen. Tom Daschle, D-S.D.
-Mark Knoller, of CBS News, for winning the Aldo Beckman award for sustained excellence in White House coverage. Knoller won for his work covering the White House for more than 35 years and in using multiple platforms to report.
-Suzanne Bohan and Sandy Kleffman, of the Contra Costa (Calif.) Times, for winning the Edgar A. Poe Award for excellence in coverage of news of national or regional significance. They were cited for a four-part series entitled, "Shortened Lives: Where You Live Matters."
The White House Correspondents' Association was formed in 1914 as a liaison between the press and the president. Every president since Calvin Coolidge has attended the dinner.