UN Secretary-General Kofi Annan arrived on Thursday and immediately went into closed door talks with Kenyan President Mwai Kibaki.
The 15 members of the UN Security Council, as well as rebel Sudan People's Liberation Movement (SPLM) leader John Garang and Sudan's Vice-President Ali Usman Taha, arrived shortly before 9am (0600 GMT).
The council has only met outside its headquarters in New York, on three previous occasions. The last time was 14 years ago.
The meeting in Nairobi on Thursday and Friday comes after the Khartoum government and the SPLM, the country's main southern rebel group that rose up in 1983, announced that a comprehensive deal to end their 21-year-old war was likely to be signed within days of negotiations resuming next week.
The Nairobi meeting also comes in the wake of mounting international criticism of the Khartoum government, notably over the allegedly forced relocation of displaced civilians in Darfur, a region in west Sudan ravaged by armed conflict since February 2003.
During the meeting, the council is expected to adopt a resolution calling for renewed efforts to cap marathon talks between Khartoum and the SPLM with a comprehensive peace accord.
Talks between the government and the SPLM intensified in 2002. Since then a series of protocols addressing the root causes of Africa's longest war, such as the sharing of wealth - especially oil resources - and political power, have been signed.