The two are to develop, manufacture and market a new generation of devices with multimedia, wireless internet, mobile phone capabilities and hi-colour touch-screens.
The palm-sized devices will by powered by Microsoft's Windows CE operating system.
The hook-up comes a week after the US software giant teamed up with Swedish mobile telecoms leader Ericsson in a mobile data venture.
This combination agreed to use Microsoft's Mobile Explorer browser but not exclusively its Windows CE operating system.
There is a race going on at the moment to dominate the market for handheld/mobile internet connections.
Both mobile phone companies and handheld computer companies such as Psion and 3Com's Palm are aiming to come up with the winning product for a market which is expected to outstrip that for personal computers.
Windows battle
The new generation devices would have the potential to offer full internet access, video and audio broadcasts and normal mobile phone functions.
The race is not just between the hardware makers, but also between the Epoc operating system and Windows CE.
Epoc was devised by UK handheld computer company Psion for its own products, but is now being developed by a number of mobile phone companies in the Symbian joint venture.
Microsoft however is keen to do as many deals as possible to ensure that its Windows CE system wins the day and becomes the industry standard.
A working prototype of the Siemens-Casio venture will be on show within three months, the companies promised.
They say it will be a palm-size PC able to play digital music and video, access e-mail and the Internet and work as a mobile phone.
Large market
"This product is the first of an anticipated complete range of wireless internet devices that will be capable of connecting wirelessly to Microsoft Exchange Server-hosted information and any wireless internet and e-mail service," the firms said.
The wireless internet access market is estimated to reach 15 million units by 2003.
The Siemens-Casio device will initially work on GSM networks but has the potential to work on so-called Code Division Multiple Access (CDMA) networks and will also be able to use high bandwith mobile radio standards, starting with General Packet Radio Service (GPRS) and moving on to IMIT-2000 and UMTS.
In developing the mobile terminals, Casio will provide electronic parts and personal data assistance technology, while Siemens will provide mobile telecommunications technology, they said.