"It is clearly a danger," Gov. Jennifer Granholm said during the signing ceremony.
She said she was proud to sign the bill since Michigan is the home of the U.S. auto industry, and the Big Three automakers all support the bill.
U.S. Transportation Secretary Ray LaHood, who launched a nationwide anti-texting-while-driving campaign several months ago, called the situation "epidemic" because "everybody has a cellphone."
"Everyone thinks they can drive" and text a message, LaHood said.
Starting July 1, a person caught texting while driving in Michigan could be slapped with a $100 fine for the first offense and $200 if caught again, The Detroit News reported.
In a related development, television personality Oprah Winfrey aired a "No Phone Zone" special Friday during a rally in Detroit. Rallies in Washington, Atlanta, Boston and Los Angeles also were conducted.
Winfrey became interested in the texting issue after reading about a 24-year-old New York woman who was hit by a driver who was texting, said Don Halcombe, spokesman for Harpo Studios, which produces "The Oprah Winfrey Show."