Arriving in the capital Sanaa under tight security, Mrs Clinton said she wanted to convince Yemen’s government the US wanted more than military ties.
She is the first US secretary of state to visit Yemen for more than 20 years.
Yemen has seen numerous anti-US attacks since the 2000 bombing of the USS Cole in Aden which killed 17 US sailors.
Recent attacks are thought to have been inspired by the radical US-Yemeni cleric Anwar al-Awlaki, thought to be hiding in Yemen.
The Yemen-based group al-Qaeda in the Arabian Peninsula is also thought to be behind a foiled attempt to blow up a US airliner over Detroit on Christmas Day 2009.
‘Broaden the dialogue’
Mrs Clinton met Yemeni President Abdullah Saleh shortly after arrival, and is planning to meet opposition figures, NGO representatives and students in the next few hours.
She will discuss women’s rights and the practice of child marriage, and highlight the work of local NGOs.
Mrs Clinton, who is on a tour of Gulf states, said Washington wanted to address the underlying causes of the violence, including poverty and social inequality.
“It’s not enough to have military-to-military relations,” she said.
“We need to try to broaden the dialogue. We need to have this dialogue with the government.”
“We have rebalanced our aid package so it is not so disproportionately consisting of funding necessary for the counter-terrorism agenda but also includes the other priorities,” she added.
The Yemeni government welcomed the visit.
“Yemen is keen on continuing bilateral discussions to address development and security challenges,” it said in a statement.
Over the last couple of years, US military and civilian aid to Yemen has increased almost 100% to around $300m but experts say this is not enough to address Yemen’s problems or deal with the threat posed by radical groups in the country.
As well as fighting al-Qaeda, Yemen’s government is trying to deal with a Shia rebellion in the north and a secessionist movement in the south.
Mrs Clinton’s visit comes a month after cables released by Wikileaks suggested that Yemen had allowed secret US air strikes against al-Qaeda militants.