Most Rev Justin Welby spoke about love, faith in God, how to achieve world peace and the role of women with Ms Yousafzai, 19, in front of hundreds of people at Dudley College.
It's part of the Archbishop's three-day visit to the Diocese of Worcester, which has included meetings with disabled children, business leaders, brewers and a live conversation with Radio 2 presenter and Christian Jeremy Vine.
Malala Yousafzai, a Muslim, won the Nobel Peace prize in 2014 after speaking out against Taliban occupation and oppression in the Swat region of Pakistan, where her family runs a chain of schools. The Islamist group regularly stopped women receiving an education there.
A Taliban militant attempted to assassinate Ms Yousafzai by shooting her on her school bus in 2012. She survived and has since moved to England where she was internationally recognised for standing up for women's rights.
According to the Diocese of Worcester she told the audience that she knew she couldn't move forward with her life if she didn't receive an education.
Justin Welby said that he was struck by the leadership and the vision Malala had to do something about it, when most people wouldn't.
Malala replied that it was more difficult for her not to speak out, adding: "There's nothing to lose when you love people."
"There is nothing to lose when you love others." The astonishing Malala with @JustinWelby #ABCWorcDudley pic.twitter.com/WF96X2XlQ0
— chris russell (@revchrisrussell) October 8, 2016
There's nothing to lose when you love people- great quote from Malala #ABCworcdudley
— Simon Hill (@simonrhill) October 8, 2016
World peace is only achievable if women's groups are involved. Great quote from @JustinWelby #ABCWorcDudley
— Nikki Groarke (@NikkiGroarke) October 8, 2016
Powerful profound insights from very special 19yr old so emotional bless you Malala #ABCWorcDudley @bishopdudley @BishopWorcester pic.twitter.com/HMkT56AuUt
— Bev Jameson (@bev_jameson) October 8, 2016
@Malala thank you for your wisdom encouragement & inspiration at @dudleycollege tonight you truly witness the power of hope #ABCWorcDudley
— Nicholas Kaleniuk (@nickkaleniuk) October 8, 2016
The Archbishop also asked whether there were times when Malala wanted to give up and if her faith sustained her, to which she replied that following the right course of action in society gives you faith to keep going.
Mr Welby also said world peace was only achievable if women's groups were involved in the process and that even when his faith in God falters, God never lets go of him.
He acknowledged that the world would never agree as one on many issues, but it was possible - and necessary - to achieve non-violent disagreement across every issue.
