David Paterson has been sworn in as New York's 55th governor, replacing the scandal-hit Eliot Spitzer.
Mr Paterson becomes New York's first African-American governor
Mr Spitzer sensationally resigned last week after evidence emerged that he was the client of a prostitution ring.
Mr Paterson makes history as New York's first African-American governor and as the first legally blind person to hold such a post permanently.
His first main test will be negotiating the state's $124bn (£61bn) budget, which is due in two weeks' time.
Mr Paterson took office as governor before a joint legislative session in the chamber in New York's state capital, Albany.
His wife and family by his side, Mr Paterson was greeted by cheers as he gave an inaugural address that focused on the need to move the state forward and to promote unity.
"I never expected to have the honour of serving as governor of New York state, but our constitution demands it," he said.
"This transition today is an historic message to the world that we live among the same values that we profess and that we are a government of laws, and not individuals."
Mr Paterson made no direct reference to the scandal surrounding Mr Spitzer but stressed that there was important work to be done.
"Look folks, this has been a very difficult week. But there have been turbulent weeks in New York's past and there will be anxious weeks in our near future, but we move forward," he said.
"There's work to be done... there's trust that needs to be restored, there are issues that need to be addressed."
He urged New York's politicians to work together to pass legislation he said was needed to help families struggling to make ends meet and to give all the state's residents equal opportunities.
Among those gathered for the ceremony were New York City Mayor Michael Bloomberg, New York's Democratic Senators Hillary Clinton and Charles Schumer and former state Governor George Pataki.
Mr Paterson will serve out the remainder of his predecessor's term, due to come to an end in 2010.
Eliot Spitzer's fall from grace was a political bombshell
Speaking last week, he said: "It's daunting. I definitely feel anxiety... but in the end, we have a job to do. And we're here to do that job."
Analysts say he is likely to be a more conciliatory figure than Mr Spitzer, who was known for his combative style.
Mr Paterson's rise to the post of state governor follows the spectacular downfall last week of his predecessor, who resigned formally at noon local time (1600 GMT) on Monday.
Federal investigators have alleged that a wiretap caught Mr Spitzer arranging to meet a $1,000-an-hour prostitute dubbed "Kristen" who worked for the Emperor's Club VIP prostitution ring.
Mr Spitzer is reported to have paid thousands of dollars over 18 months to the ring.
Federal prosecutors are still deciding whether he will face any charges, which could include soliciting and paying for sex, breaking banking laws, and transporting someone across state lines for immoral purposes.