Blair flew into an air base and was greeted by Riyadh governor Prince Salman bin Abd al-Aziz, the official SPA news agency reported on Saturday.
He was due to meet with Crown Prince Abd Allah bin Abd al-Aziz to discuss "issues of mutual interest," including Iraq and the Middle East peace process, a Saudi official said.
Abd Allah has been running Saudi Arabia's day-to-day affairs since King Fahd suffered a stroke a decade ago. The ailing monarch has been in a Riyadh hospital since 27 May.
"The prime minister will want to discuss with the crown prince the Gleneagles (G8) summit and our European Union presidency, the situation in Iraq, the Middle East peace process, wider developments in the region and our important bilateral relationship," British embassy spokesman Barrie Peach said.
Blair said he hoped new initiatives on the Middle East would emerge from the annual gathering of world leaders he is to host between 6–8 July in Gleneagles, Scotland.
"There have been developments over the past few days that lead me to believe we may be able to make some progress there," Blair said on Friday, apparently referring to Israel's plan to withdraw soldiers and settlers from the Gaza Strip starting in August.
"At the G8 next week, I hope, but I can't yet be sure, that there will be a specific initiative on the Israeli-Palestinian issue, and we're working on that at the moment," he said.
Blair, whose country assumed the rotating EU presidency on Friday, said the 25-member bloc should renew efforts to assist the peace process.
Saudi Arabia has come up with its own peace plan, which was authored by Abd Allah and endorsed at an Arab summit in Beirut in 2002, offering Israel peace and normal ties in return for its withdrawal from occupied Arab lands.
Crown Prince Abd Allah bin Abd
al-Aziz will meet with Tony Blair
Blair has also put aid to Africa at the top of his agenda for the G8 summit and will presumably urge Saudi Arabia, the world's top oil exporter, to contribute to efforts to lift the continent out of poverty.
British Finance Minister Gordon Brown last month called on wealthy oil-producing Gulf countries, which have profited from recent record-high crude prices, to join the drive through both aid and debt relief.
Blair visited Saudi Arabia in October 2001 as part of efforts to shore up an international anti-terror coalition during the US-British bombing of Afghanistan which followed the 11 September attacks on the United States. The Muslim kingdom has since been hit by terror at home.
Suspected al-Qaida fighters launched a spate of bombings and shootings in May 2003, triggering a government crackdown on extremists.
In March, influential Interior Minister Prince Nayef bin Abd al-Aziz took a swipe at Britain for sheltering Saudi Islamist dissident Saad al-Faqih, head of the Movement for Islamic Reform in Arabia (MIRA), who is seeking the overthrow of the Saudi ruling family.
Britain in December froze MIRA's assets on suspicion that Faqih is associated with al-Qaida, after Washington named the London-based dissident as a suspected Al-Qaida financier.
Saudi Arabia is a major client of Britain's arms industry and is linked to London by the multi-billion-dollar al-Yamamah contract signed in 1985, the biggest arms sale in British history.