Lula and his vice president, Jose Alencar, waved to cheering supporters as he toured the capital Brasilia in a convertible Rolls Royce.
LULA TAKES CHARGEA former shoe shine boy has been sworn in as Brazil's first working-class president - sparking huge celebrations across the country.
Thousands of people took to the streets, waving flags, beeping horns and hailing the election of Luiz Inacio da Silva as a new era in the country's history.
The Workers' Party leader, known as Lula, has enjoyed an unprecedented rags-to-riches story.
He came from a poverty-stricken background and only learned to read when aged ten.
He worked as a shoe shiner and peanut seller before training as a metal worker and working in Sao Paulo - a job in which he lost part of a finger in an accident - before eventually moving into politics following the death of his wife.
Flanked by white-uniformed cavalry, Lula and his vice president, Jose Alencar, waved to cheering supporters as he toured the capital Brasilia in a convertible Rolls Royce.
At the Congress building Lula took the oath of office amid cheers of "Lula, Lula."
Senate President Ramez Tebet then declared him president.
Lula's appeal to the poor gave him a record-breaking 52 million votes in his fourth attempt at the presidency.
After his win, he organized a party for the people rather than for dignitaries.