Trump Inauguration: President Vows To End 'American Carnage'
He spoke of abandoned factories, rampant crime and a failed education system, pledging that his presidency would bring about change.
"This American carnage stops right here and stops right now," President Trump said on the steps of the Capitol.
Thousands of Trump supporters travelled across the country to witness the occasion from the National Mall.
The moment marks the end of an improbable journey for the property tycoon after a campaign marked by controversy.
Shortly after the ceremony Mr Trump was seen signing his first official actions as the 45th president.
He sent his Cabinet nominations to the Senate as well as a signed a proclamation for a national day of patriotism, according to Press Secretary Sean Spicer.
He also signed into law a waiver allowing retired Marine General James Mattis, his pick for defence secretary, to serve in the post.
The change of hands was reflected on the White House website, which was scrubbed of Mr Obama's policies and replaced with Mr Trump's new agenda.
The Trump administration has only listed six issues on the website: energy, foreign policy, jobs and growth, military, law enforcement and trade deals.
Critics pointed out the revamped site made no mention of civil rights, LGBT rights, healthcare or climate change.
Mr Trump briefly spoke at a Capitol luncheon to thank his Democratic opponent Hillary Clinton and her husband, former President Bill Clinton, urging them to rise to applause.
In his inaugural address, he promised to be the voice of the "forgotten people", ignored by Washington politicians.
Today, he said, was "the day the people became rulers of this nation again".
"I will fight for you with every breath left in my body and I will never ever let you down," said President Trump after Chief Justice John Roberts administered the oath.
"America will start winning again, winning like never before.
"We will bring back our jobs, bring back our borders, bring back our wealth and we will bring back our dreams."