At a press conference in Sochi, Mr Cameron admitted the two men differed over how to deal with the conflict.
But he said they agreed on the need to end the violence, prevent the growth of extremism and stop Syria "fragmenting".
Mr Putin said the two had a "common interest" in stabilising the country.
The talks, at Mr Putin's summer residence in the Black Sea resort of Sochi. were dominated by the two-year conflict in Syria, in which 80,000 people have been killed.
The UK has recognised the coalition of forces opposed to the Syrian government and said President Bashar al-Assad must step down as part of a transition to a more representative government.
By Steve RosenbergBBC News, Sochi
David Cameron flew to Sochi seeking common ground with Russia on Syria.
There didn't appear to be any major breakthrough. Vladimir Putin said vaguely that the two leaders had discussed "various options". There were no details about when an international peace conference proposed this week by Russia and America would take place.
But the talks themselves signalled a thaw in British-Russian relations. President Putin gave Mr Cameron a tour of the stadium being built for next year's Sochi winter Olympics.  And the prime minister announced a resumption of "limited co-operation" between UK and Russian security services for the Sochi Olympics.
At the end of their talks, the Kremlin leader reportedly presented David Cameron with a bottle of Armenian cognac, noting that Stalin had given Churchill cognac in 1945. Mr Cameron replied that he often sits in Churchill's study at Chequers - and would keep the bottle there as a memento.
Britain has stepped up support to the opposition, providing armoured vehicles and body armour as well as communications supplies, and said the EU arms embargo may need to be lifted to help opposition forces.
In contrast, Russia has opposed further action against Damascus and expressed concerns about the prospect of a political vacuum in the event of the government's collapse and the rise of Islamist extremist groups.
Despite their different approaches to the crisis, Mr Cameron said the two had made "real progress" in discussions he described as "substantive, purposeful and frank".
He welcomed Russia's recent agreement to convene an international conference to find a political solution to the crisis.
He said there was an urgent need to "break the vicious cycle that threatens to destroy Syria" and that the UK and Russia, as members of the UN Security Council and the G8, must take the lead in helping shape a political transition.
"As permanent members of the United Nations, we must help to drive this process, working with partners in the region and beyond, not just bringing the regime and opposition together at one negotiating table but Britain, Russia, America and other countries helping shape a transitional government that all Syrians can trust to protect them."
President Putin said he and Mr Cameron had discussed a number of steps and options to resolve the crisis",
The two, he added, had "a common interest in putting an end to the violence in the country and launching a peace settlement preserving Syria as an integral and sovereign state".
The UK has acknowledged that there are some extremist elements fighting alongside more moderate opposition forces, but it says only a political transition can bring long-term stability to Syria.
Our correspondent said the meeting was taking place as developments, including Israeli air strikes on targets in Syria and concerns about the possible use of chemical weapons, risk bringing the conflict into an even more dangerous phase.
The Syrian authorities say the strikes by Israel on army targets this month show it is co-ordinating with militants to destabilise the government, but Israel said it was targeting weapons bound for Hezbollah militants in Lebanon.
Mr Putin, addressing relations between the UK and Russia, said that bilateral trade and wider co-operation were increasing, and London and Moscow would be collaborating to develop "promising" energy projects.
Mr Cameron said the two countries still had differences but that a more effective relationship would make the citizens of both nations "safer and better off".
The UK will be providing "limited" security support for the Winter Olympics next year in Sochi, the prime minister revealed.
Relations between the UK and Russia were strained for many years after the death of Russian dissident Alexander Litvinenko in London in 2006 - a period in which there were no meetings between Mr Putin and senior British ministers.
But Mr Cameron visited Moscow in 2011 and Mr Putin came to London last year, where the two watched a judo bout at the Olympics, as the countries sought to broaden their trade and security links.
Prime Minister David Cameron has said the international community must do more to "help shape" a transitional government in Syria after holding talks with Russian President Vladimir Putin.