British Foreign Secretary William Hague says he believes the momentum for change in Burma is real, but has warned against relaxing pressure too soon.
Ms Suu Kyi said she was confident that Britain and others in the world would help Burma's move towards democracy.
Mr Hague's visit is the first by a British foreign secretary to the country for more than 50 years.
On Thursday he met top leaders in Nay Pyi Taw, the capital, and called for more progress on releasing political prisoners.
Mr Hague is the latest in a series of top diplomats to visit the South East Asian nation, which has taken steps towards reform in recent months.
In November 2010 it held its first polls in 20 years, replacing military rule with a military-backed nominally civilian government.
It has also begun to engage in dialogue with Aung San Suu Kyi, whose NLD party won the last elections in 1990 but was never allowed to take power.
Some media censorship has been relaxed and some - but by no means all - political prisoners freed.
Poor rights record
Mr Hague said he had been struck by the potential for Burma if the reform trend continued.
"This is a very exciting time because there is a chance that what she [Aung San Suu Kyi] and her colleagues have hoped and longed for for so long will actually take place in this country," he said.
He paid tribute to Aung San Suu Kyi and what he called her indispensable work in bringing Burma to this point.
But, reports the BBC's Rachel Harvey in Rangoon, he acknowledged the dangers of engaging with a government still tainted by a history of abuse and repression.
"We must not assume that everything is done and relax our efforts prematurely," he said.
He also said there was "much more" work to be done before sanctions were lifted.
Mr Hague was also expected to meet other dissidents and representatives of ethnic minority groups seeking greater autonomy before ending his visit.
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