It is understood that during the VIPs' initial private meeting, Mr McGuinness welcomed both the Queen and President Higgins in Irish.
The Deputy First Minister is said to have commented briefly on the Queen's visit to Dublin last year, and in particular her comments regarding all the victims of the conflict.
A Sinn Fein spokesman said: "He emphasised the need to acknowledge the pain of all victims of the conflict and their families."
Mr McGuinness is said to have spoken to the Queen of the significance of her visit, and of the need for it to be built upon in the time ahead.
Sinn Fein said Mr McGuinness told the Queen that their meeting was a "powerful signal that peace-building requires leadership".
The Deputy First Minister also praised the role of the President in today's encounter, and welcomed that the engagement took place at an event celebrating culture across Ireland.
In an historic encounter, the Queen has shaken the hand of Sinn Fein's Martin McGuinness.
Today's handshake between the Queen and former IRA commander Martin McGuinness is a historic gesture of peace. Here are some others.
The hands of history? The Queen and former IRA Commander Martin McGuinness will make a remarkable gesture for peace today.