In a bid to raise awareness about the importance of protecting the ocean, Surangel Whipps Jr, who leads the nation of roughly 17,600 people, conducted the interview with a "mermaid" alongside a giant clam.
His office said the under-sea chat was facilitated by technology called the LiFi Talking Mask, which uses light to transmit sound underwater, promoted by social entrepreneur Gunter Pauli.
"Palau successfully hosted the world's first-ever live underwater conversation with a Head of State," his office said.
Footage released by Pauli's group the Blue Economy, which facilitated the chat, showed Whipps in underwater gear speaking with the "mermaid" -- actually Estonian Olympic swimmer and activist Merle Liivand.
But the slightly garbled audio suggests the technology might still be a work in progress.
Palau is an archipelago of around 340 islands east of the Philippines and is extremely vulnerable to rising seas.
Whipps has acknowledged some of his country's atolls could be lost in coming years.
In a post-dive debrief, Whipps said "Palau has always believed in the sustainable use of the oceans. It's in our DNA."
Then-Maldives president Mohamed Nasheed made waves in 2009 when he held an underwater cabinet meeting with scuba-clad officials.
In 2019, former Seychelles president Danny Faure conducted an interview from a submersible craft in the Indian Ocean.
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