Hugo Chavez has warmly welcomed Mr Medvedev to Venezuela
Russia and Venezuela have signed an agreement to promote the development of nuclear energy for civilian use.
The agreement was signed during a visit by Russian President Dmitry Medvedev to Venezuela's capital, Caracas, on the latest leg of his Latin American tour.
Under the accord, Russia would help Venezuela build a nuclear energy plant. Joint gas projects were also approved.
Military co-operation is also high on the agenda of Mr Medvedev's talks with Venezuelan President Hugo Chavez.
Russian and Venezuelan warships are scheduled to hold joint military exercises later this week.
The Russian vessels, including the flagship missile cruiser Peter the Great and two support vessels, appeared off La Guaira, near Caracas, early on Tuesday.
The destroyer Admiral Chabanenko docked while Venezuelan forces fired a 21-gun salute.
This is first Russian deployment of its kind in the Caribbean since the end of the Cold War.
Russia is already a major arms supplier to Venezuela, with contracts worth some $4.4bn (£2.39bn).
Mr Medvedev's visit is part of a Latin American tour aimed at boosting both Russia's presence and trade ties in a region traditionally of strategic importance to the US.
Venezuela and Russia have increased energy co-operation
BBC diplomatic correspondent Jonathan Marcus says the Russian president's aim is to show Washington, where President-elect Barack Obama is preparing for office, that if the US does things in Europe near Russia's borders which Moscow does not like, then Russia can pursue its own policies in a region long seen by Washington as its backyard.
Boosting bilateral trade between Russia and Latin America, which could reach $15bn (£9.9bn) this year, is another priority for the Russian president during his talks.
The Russian leader travelled to Venezuela from Brazil, where he and President Luiz Inacio Lula da Silva held talks on boosting trade and technical co-operation.
In Rio de Janeiro, the two presidents expressed their view that the "Bric" countries - Brazil, Russia, India and China - should hold their first summit in Russia in 2009.
Mr Medvedev's visit takes place just a few days after the Chinese president, Hu Jintao, toured several Latin American nations with a view to strengthening ties.