Ellen Johnson-Sirleaf has been sworn in as Liberia's president, making her Africa's first elected female leader.
The new president pledged to fight corruption and create jobs
Loud cheers greeted her inauguration, with US First Lady Laura Bush and Secretary of State Condoleezza Rice among those at the ceremony.
Mrs Johnson-Sirleaf says her top challenge is to maintain peace, law and order after 14 years of civil war.
UN peacekeepers and Liberian police have maintained tight security around the capital, Monrovia.
About 500 UN troops have been redeployed to the area, with more police officers on the capital's streets.
Public vehicles have been banned from Monrovia's streets for the day.
Two US Navy warships are stationed off Liberia's coast, in a show of support for Mrs Johnson-Sirleaf's presidency.
The BBC's Elizabeth Blunt in Monrovia says that after all the years of war, there was no public building in a good enough state to host the ceremony.
The guests gathered in the grounds of the Capital Building and sat on white plastic chairs with coconut matting to protect them from the sun and the rain. They then walked over the road to the stained and gloomy Executive Mansion for a reception, our correspondent says.
She says Ms Rice got an especially warm welcome in a country founded in 1847 by freed American slaves.
Other guests include Presidents Thabo Mbeki of South Africa and Nigeria's Olusegun Obasanjo.
Thousands of volunteers have been repainting buildings, bridges and road signs and clearing rubbish from Monrovia's streets in readiness for the ceremony.
In an hour-long speech after the ceremony, she called for a moment of silent prayer to remember the thousands of people who died during the war.
"We know that your vote was a vote for change, a vote for peace, security... and we have heard you loudly," she said.
Her vow to wage a war on Liberia's "major public enemy" - corruption was also applauded by the large crowd.
She said that leading civil servants and ministers would have to declare their assets.
"I will lead by example - I will be the first to comply."
Mrs Johnson-Sirleaf becomes Liberia's first elected head of state since the end of the war in 2003.
The 67-year-old grandmother won 59% of the vote in November's run-off election, beating Liberian football star George Weah.
A former World Bank economist and veteran politician, Mrs Johnson-Sirleaf is nicknamed the Iron Lady but has promised to show a new, softer side as president.
The challenges which lie ahead as she begins her six-year term are great.
After a quarter of a century of war and misrule, Liberia's road network is in ruins, there is no national telephone network, no national electricity grid and no piped water.
A further challenge is to reintegrate the 100,000 ex-combatants, including many former child soldiers, into civilian life.