Panetta gave a ringing endorsement to Egyptian President Mohamed Morsi, emphasizing the leader's commitment to establishing democratic rule in the North African nation.
His visit came a day after meeting with officials in Tunisia, where a popular uprising last year ended with the overthrow of that country's leadership and touched off a wave of protests in Egypt, Libya and now Syria that came to be known as the Arab Spring.
The Pentagon chief is also scheduled to meet with diplomats in Israel and Jordan as part of his week-long goodwill trip through the region.
Morsi replaced former President Hosni Mubarak, who was driven from power last February as part of the Arab Spring movement.
Under Mubarak, Egypt had long been a supporter and ally of the United States's counterterrorism efforts in the Mideast and North Africa.
But since his election in July, Morsi has been involved in a tenuous power-sharing agreement with the country's temporary ruling military council, headed up by Field Marshal Mohamed Hussein Tantawi.
The military council was scheduled to fully hand over power to a civilian government last June.
But that month, Tantawi dissolved the country's parliament, driving a wedge between the council and Morsi's fledgling administration and casting doubt on the stability of Egypt's burgeoning democracy.
Parliament's dissolution and the council's decision to limit Morsi's presidential powers and extend the group's authority until the election of a new parliament has thrown a wrench into Egypt's democratic transition.
However, Panetta told reporters that Morsi and Tantawi "have a good relationship and are working together toward the same goal," adding Tantawi was "continuing commitment to transition to full civilian rule."
That type of peaceful transition will ensure continued military cooperation between the two nations in an increasingly dangerous part of the world.
"We have a history of working with the Egyptian military leadership. We will continue to provide the aid and assistance we can to help them in this effort," Panetta said. "Our goal, frankly, is an Egypt that can secure itself in the region."