This is a very good step. It won't deter most users of child pornography, but should stop many people from starting down that road. Good for you, David Cameron.
UK Prime Minister David Cameron, who had called for action from the firms, has welcomed the move.
In July, Mr Cameron called on Google and Microsoft's Bing - which together account for 95% of search traffic - to do more to prevent people getting access to illegal images.
He said that they needed to ensure that searches which were unambiguously aimed at finding illegal images should return no results.
Now both companies have introduced new algorithms [software instructions] that will prevent searches for child abuse imagery delivering results that could lead to such material.
Writing in Britain's Daily Mail, Google executive chairman Eric Schmidt says: "These changes have cleaned up the results for over 100,000 queries that might be related to the sexual abuse of kids."
"As important, we will soon roll out these changes in more than 150 languages, so the impact will be truly global."
He goes on to describe work in the area of deterrence. "We're now showing warnings - from both Google and charities - at the top of our search results for more than 13,000 queries.
"These alerts make clear that child sexual abuse is illegal and offer advice on where to get help."
Microsoft, which in a rare display of unity is working closely with Google on this issue, says its Bing search engine will also produce clean results.
The company said it had always had a zero tolerance attitude to child sexual abuse content and had been putting in place stronger processes to prevent access since the summer.
Later on Monday, the two companies will join other internet firms at Downing Street for an Internet Safety Summit.
The prime minister said significant progress has been made since his speech in July calling for action, but warned that new legislation could be introduced if the companies failed to deliver. He said in July that "Google and Microsoft said blocking search results couldn't be done, that it shouldn't be done… I did not accept that then and I do not accept that now".
Child protection experts say most illegal abuse images cannot be found via web searches, but are hidden on peer-to-peer networks.
A June report by the UK's Child Exploitation and Online Protection Centre (Ceop) highlighted how the "hidden internet" helped distributors of child abuse images to evade detection by using encrypted networks and other secure methods.
Google and Microsoft have agreed to work with the UK's National Crime Agency and the Internet Watch Foundation to try to tackle networks which host child abuse images.
The two companies are also using their technological expertise to help in the identification of abuse images.
Microsoft's PhotoDNA already allows a photo to be given a unique "fingerprint" which means it can be tracked as it is shared across the internet. Now Google has developed VideoID which does the same job with videos.
Both firms will provide this technology to the National Crime Agency and other organisations to help in the work of finding and detecting those behind the creating and sharing of child abuse images.
But critics have accused the government of underfunding online child protection.
Ceop, which is now part of the National Crime Agency, has been accused of missing a recent opportunity to identify hundreds of people downloading illegal images.
Police in Toronto revealed that in 2012 they had shared hundreds of names of British people with Ceop who were alleged to be customers of a Canadian firm that sold videos of young children.
The operation to close down the business saw hundreds of people arrested in Canada and around the world - but none in Britain.
On Friday, the National Crime Agency said Ceop had examined the material but it had been classified as being on a low level of seriousness. However, the Agency has now ordered a review of Ceop's handling of the case.