Former torture victim Michelle Bachelet has been sworn in as Chile's first female president.
Michelle Bachelet takes over Chile's long-serving coalition
Ms Bachelet, 54, who claimed a convincing poll win in January, smiled broadly and waved after taking her oath in the coastal city of Valparaiso.
Bolivian President Evo Morales, Venezuelan President Hugo Chavez and US Secretary of state Condoleezza Rice were among those at the ceremony.
Ms Bachelet is taking over with the economy booming, correspondents say.
Ms Bachelet embraced her predecessor, Ricardo Lagos, as she took office amid applause and cheers in the congressional building in Valparaiso.
More than two dozen heads of state attended the ceremony.
Correspondents say the event may have helped efforts to iron out some regional difficulties, for example testy relations with Bolivia over territorial disputes and gas supplies.
Ms Bachelet was pictured laughing as she received a gift of a charango guitar from Mr Morales on the eve of the inauguration, and the two exchanged compliments.
At the ceremony, Ms Rice offered congratulations to Chile's first female president, and also warmly greeted Mr Morales, despite the anti-US platform on which he was recently elected.
Latin America's third directly-elected woman president takes over for a four-year term from Mr Lagos, who remains extremely popular.
He urged Chileans to support their new leader, calling her "a symbol of a country that has advanced toward new challenges, a society that has changed deeply for the better toward liberty, pluralism, equality".
Ms Bachelet takes over at the helm of the centre-left coalition which has governed Chile for the past 16 years, since the fall of General Augusto Pinochet's military regime.
A doctor and a single mother, she was seen as an unusual candidate in a country considered one of the most socially conservative in South America.
Ms Bachelet, who was jailed and tortured by Chile's former military junta, has promised to build a more equitable and tolerant society.
She has said she is keen to bridge the gap between rich and poor and to give a greater voice to women and indigenous people.
Half the members of her new cabinet are women.
However, she has said she will not bring radical change to the country, which has become one of the region's strongest economies.