The Virgin Group founder put up a blog post with pictures and video of the ex-president kitesurfing off one of Branson's private islands in the British Virgin Islands. Branson writes that Obama, who's a native of Hawaii, told him he was prevented from surfing by his security detail during his time in office.
Branson says after spending a couple days learning to kitesurf, Obama bested the billionaire in a watersport challenge.
He says inviting the Obamas to his island was "a huge honor."
Obama spent his first days after leaving Washington vacationing in Palm Springs, California.
Barack Obama and Richard Branson revealed burgeoning friendship during watersport competition in British Virgin Islands
Richard Branson has described hosting the Obamas for their post-presidency holiday in the British Virgin Islands as "an honour".
The billionaire entrepreneur revealed how he challenged Barack Obama to a watersports challenge after the former US president revealed he had not been allowed to indulge in his passion for surfing since he was elected into the White House in 2008.
Mr Branson wrote: "One of the first stories Barack told me when he and Michelle arrived on Moskito Island was how, just before he became President, he had been surfing on a dangerous break in Hawaii.
"When he came in from an exhilarating session, the new head of his security team turned to him and said: 'This will be the last time you surf for eight years'.
"For the next eight years he didn’t have the chance to surf, enjoy watersports or do many of the things he loved."
From the pictures and video, it appears the former President had a whale of a time.
Mr Obama had never kitesurfed before his holiday, so the Virgin boss taught him how.
While the former president got his sea legs, Mr Branson learned how to foil board.
Then, the two engaged in a friendly competition.
Mr Branson explained what happened: "As you can see in the video, Barack and I both fell many times, but we kept trying again and again and made progress over the days.
"We were neck and neck until the last run on the last day, when I got up on the foilboard and screamed along for over 50 metres, three feet above the water.
"I was feeling very pleased with myself, only to look over and see Barack go 100 metres on his kiteboard! I had to doff my cap to him and celebrate his victory."
It appears Barack Obama is certainly enjoying his well-deserved break from politics.
Obama Kite Surfs With Richard Branson in Virgin Islands Holiday
Freed from the constraints of the White House, former President Barack Obama surfed up a storm — on a kiteboard.
Obama tried out the water sport, which is a cross between surfing and paragliding, while on vacation in the Virgin Islands.
His partner in fun was British businessman Richard Branson and the carefree grin on Obama's face in newly released photos from their aquatic adventure speaks volumes.
"One of the first stories Barack told me when he and Michelle arrived on Moskito Island was how, just before he became President, he had been surfing on a dangerous break in Hawaii," Branson recounted on his blog.
"When he came in from an exhilarating session, the new head of his security team turned to him and said: 'This will be the last time you surf for eight years.' For the next eight years he didn't have the chance to surf, enjoy water sports or do many of the things he loved."
Obama, who learned to surf while growing up in Hawaii, and the former first lady, were flown by Branson to the island paradise for their first post-White House vacation getaway.
Ever the competitors, Obama and Branson threw down the gauntlet — the ex-president would learn to kite surf and mogul would master the foilboard (a surfboard with a hydrofoil that allows riders to glide over the water).
"We agreed to have a final-day battle to see who could stay up the longest," Branson wrote.
Branson admitted they both struggled to get the hang of their respective sports. And on the appointed day, the adventurous Brit said he was feeling good when he managed to ride his foilboard for about 50 meters, some three feet above the water.
"I was feeling very pleased with myself, only to look over and see Barack go 100 meters on his kiteboard!" Branson wrote. "I had to doff my cap to him and celebrate his victory."