Mrs Obama correctly spelt the name of "America" to advance in the game but nearly came unstuck on the word "happiness" -- but only because she was balanced on one foot at the time.
She then joined the 30 or so children aged eight to 13 as they danced to the theme song from "Rang De Basanti" (Colour Me Saffron) by Indian composer A.R. Rahman, who won two Oscars last year for hit film "Slumdog Millionaire".
The film, which was released in 2006, stars leading actor Aamir Khan and has the theme of tackling government corruption.
"I love dancing. Oh that was fun!" the mother-of-two told children before giving a five-minute motivational speech about the importance of education.
"I didn’t grow up with a lot of money," she told the youngsters. "I never even imagined being the First Lady of the United States. But because I had an education, when the time came to do this, I was ready."
The children are among 2,800 disadvantaged youngsters being helped by the 800 or so volunteers from the "Make A Difference" charity, which works in 10 Indian cities.
One of the charity's founders, Jithin Nedumala, 23, said he hoped the First Lady's visit would inspire the children, who are taught basic English as part of their course.
"We are here to tell the children to dream big," he said. "They're in orphanages and street shelters where they don't have their parents to push them. Not many people believe in these kids."
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