The queen shook hands with former IRA commander Martin McGuinness on Wednesday in a landmark moment in Northern Ireland's peace process, Buckingham Palace said.
The handshake between the queen and McGuinness, now deputy first minister, took place away from the media spotlight behind closed doors in a theatre in Belfast during the monarch's visit to Northern Ireland.
It comes on the second day of her visit to the province, which on Tuesday took her to Enniskillen, the scene of a 1987 IRA bombing which killed 11 people.
The handshake follows a night of violent clashes in Belfast where gangs of youths hurled petrol bombs, injuring nine police officers.
The queen and her husband Prince Philip are also due tomeet the Republic of Ireland's head of state, President Michael D. Higgins, and Northern Ireland's First Minister, Peter Robinson.
The meeting with McGuinness is seen as an important milestone in Anglo-Irish relations after three decades of sectarian violence, known as "The Troubles", which largely ended with the Good Friday agreement in 1998.
McGuinness was a commander in the Irish Republican Army when the paramilitary group killed Prince Philip's uncle Louis Mountbatten in 1979 by bombing his boat while he was on holiday in the Republic of Ireland.
His Sinn Fein party, the political wing of the now-defunct IRA, continues to reject British rule in Northern Ireland.
In the eyes of republicans, the queen is commander-in-chief of an army that killed 13 people during a civil rights march in 1972, an event known as Bloody Sunday.
Earlier this week McGuinness said that by shaking the queen's hands he would be "shaking the hands of hundreds of thousands of unionists".
"I think that is a good thing. I think that is something that is very important to do, particularly in showing unionists that a spirit of generosity on all sides can pay huge dividends for all of us," he said.
Signs of the former tensions resurfaced overnight when around 100 missile-throwing youths clashed with police in Belfast. Police said more than 20 petrol bombs were thrown in the Broadway area of the city.
Earlier there was unrest in the west of Belfast after Republicans erected a flag and sign saying "Eriu is our queen", referring to a goddess of Irish mythology.
The queen and Prince Philip had received a warm welcome, however, when they arrived by helicopter in Enniskillen, where flag-waving crowds of supporters lined the streets to greet them.
During the day they attended a service of thanksgiving at the city's St Maccartin's Church of Ireland Cathedral, along with Protestant and Catholic clergy.
Afterwards, in a potent gesture of conciliation, they stepped across the road to St Michael's Catholic Church. It is believed to be the queen's first visit to a Catholic church in Northern Ireland.
The two-day trip is part of the queen's diamond jubilee celebrations, marking her 60th year on the throne and is her 20th visit to the province.
On Wednesday the 86-year-old monarch and her husband will also join 22,000 guests for a garden party in the grounds of Stormont, Northern Ireland's parliament buildings.