According to a read-out of the call, Mr Xi told Mr Biden: “Those who play with fire will perish by it. It is hoped that the US will be clear-eyed about this."
However, the US President said policy on Taiwan had not changed and that Washington strongly opposes unilateral efforts to change the status quo.
China claims Taiwan to be part of China, and Mr Xi has vowed to bring it under Beijing’s control by force if necessary.
Tensions have increased ahead of a possible visit to Taiwan by US House of Representatives Speaker Nancy Pelosi.
China has warned of “serious consequences” if she were to proceed with such a visit, which would make her the most senior US politician to travel to Taiwan since 1997.
Washington follows a "one-China policy" that recognizes Beijing, not Taipei, diplomatically.
However, it is also committed to providing democratic Taiwan with the means to defend itself, and pressure has mounted in Congress for more explicit support.
The White House said the long-scheduled call was part of the administration’s efforts to deepen lines of communication with China and "responsibly manage our differences."
During Thursday’s phone call, Mr Biden and Mr Xi also discussed arranging a possible face-to-face meeting, according to a senior Biden administration official. They described the call as "direct" and "honest".
When Mr Biden was vice-president he hosted Mr Xi during a visit to the US in 2015, but they have not met in person during Mr Biden’s presidency.
Some analysts believe Mr Xi has an interest in avoiding escalation as he seeks an unprecedented third term in office this year.
Others say playing up the Taiwan issue could serve as a domestic distraction from China’s slowing economy.
Following the call, Taiwan thanked Mr Biden for his support and said it would continue to deepen its security partnership with the United States.
While highlighting Taiwan, both sides also discussed the importance of economic coordination, according to read-outs.