Barack Hussein Obama has been inaugurated as the 44th President of the United States.
He took the oath of office shortly after midday EST (1700 GMT) on Tuesday, taking over from President George Bush:
"I do solemnly swear that I will execute faithfully the office of president of the United States, and will to the best of my ability, preserve, protect, and defend the constitution of the United States. So help me God."
Former Senator Joe Biden was sworn-in as Vice-President just before midday.
The swearing-in was followed by the playing of Hail to the Chief by the US Marine Corps band and a 21-gun salute.
Hundreds of thousands of people, bundled up against the cold and in a festive mood, packed Washington Mall from the Capitol to the Lincoln Memorial on the Potomac River, and along Pennsylvania Avenue to the White House.
Some estimates put the number of people at more than 2 million.
The inauguration took place amid unprecedented security. About 8000 police were deployed and a total of 32,000 military personnel were on duty or on standby.
Major US stock indexes fell on Tuesday on mounting worries over grim earnings and the health of the banking sector, highlighting the scale of the financial problems he will face.
Mr Obama, 47, the son of a black Kenyan father and a white mother from Kansas, took the oath of office with his hand on a Bible used by Abraham Lincoln at his first inauguration in 1861.
Polls show widespread support for him and optimism about the coming four years of his presidency, despite a deepening recession that has saddled the country with a $US1 trillion deficit and 11 million people unemployed.
US -"ready to lead"
In his inaugural address, Mr Obama told the world the United States is "ready to lead once more."
He said the US has opted for "hope over fear" and the nation will rise to meet its myriad of challenges.
"Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America," he said.
He also pledged bold and swift action to bring new life to the US economy.
The new president said the "badly weakened" economy will be a top priority as he works with the Congress on an estimated $US825 billion economic stimulus package.
Turning to foreign policy and the standing of the United States abroad, Mr Obama vowed the United States would leave Iraq "responsibly" and will help Afghanistan earn a hard-earned peace.
He is due to meet military commanders on Wednesday to discuss the possibility of accelerating the US troop withdrawal from Iraq and the need for more forces in Afghanistan.