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Azerbaijan's President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan shook hands after the US president described the event as "historic".
"It's been a long time coming," Trump said of the agreement, which will reopen some key transport routes between the countries and increase US influence in the region.
Armenia and Azerbaijan agreed to create a major transit corridor that will connect mainland Azerbaijan and its Nakhchivan region.
Azerbaijan and Armenia fought over Nagorno-Karabakh, an ethnically Armenian enclave in Azerbaijan, in the 1980s and 1990s, and violence has flared up in the years since.