Mr Obama said that if it went ahead, the burning could endanger US military personnel serving in Pakistan and Afghanistan.
The plan has drawn widespread international condemnation.
The pastor behind the threat says the burning would be a way to stand up to terrorism.
Terry Jones leads a congregation of 50 followers in the city of Gainesville, Florida.
In an interview with ABC television, Mr Obama said he hoped Mr Jones "understands that what he's proposing to do is completely contrary to our values as Americans, that this country has been built on the notion of freedom and religious tolerance"."And as a very practical matter, I just want him to understand that this stunt that he is talking about pulling could greatly endanger our young men and women who are in uniform," the president said.
Terry Jones leads a congregation of 50 followers in the city of Gainesville, Florida.
In an interview with ABC television, Mr Obama said he hoped Mr Jones "understands that what he's proposing to do is completely contrary to our values as Americans, that this country has been built on the notion of freedom and religious tolerance"."And as a very practical matter, I just want him to understand that this stunt that he is talking about pulling could greatly endanger our young men and women who are in uniform," the president said.
"Look, this is a recruitment bonanza for al-Qaeda. You could have serious violence in places like Pakistan and Afghanistan... This could increase the recruitment of individuals who'd be willing to blow themselves up in American cities, or European cities," he said.
"I hope he listens to those better angels and understands that this is a destructive act that he's engaging in," the president said.US officials say they cannot intervene as the church's actions would likely be protected by the US constitution's guarantee of freedom of speech.
Mr Jones said on Wednesday that he would not cancel the Koran burning, and that his plan to burn the Islamic holy book was intended to draw attention to his belief that "something's wrong."
"It is possibly time for us in a new way to actually stand up, confront terrorism," Mr Jones told reporters outside his church.
Earlier, Pakistan's President Asif Ali Zardari said in a statement that "anyone who even thought of such a despicable act must be suffering from a diseased mind and a sickly soul".
"It will inflame sentiments among Muslims throughout the world and cause irreparable damage to interfaith harmony and also to world peace," he said.
His comments were the latest in chorus of condemnation from Muslim countries.
Malaysia called it a heinous crime, while Indonesia said it would damage relations between Islam and the West.
The plan has also sparked condemnation from the Vatican, Nato and the top US Afghan commander.
US Secretary of State Hillary Clinton called the plan "disgraceful".
On Monday General David Petraeus, the top US commander in Afghanistan, warned troops' lives would be in danger if the church went ahead with its bonfire.
Muslims consider the Koran to be the word of God and insist it be treated with the utmost respect. Any intentional damage or show of disrespect to the holy book is deeply offensive to them.