Lee Myung-bak has been sworn in as South Korea's president, following a landslide victory in December's polls.
Lee Myung-bak replaces Roh Moo-hyun in the presidency
International dignitaries including Japanese Prime Minister Yasuo Fukuda and US Secretary of State Condoleezza Rice attended the Seoul inauguration.
Mr Lee, who heads the conservative Grand National Party, promised to revive his country's economy and take a tougher line towards North Korea.
The former Hyundai executive was recently cleared over a fraud inquiry.
Mr Lee was facing allegations of links to a 2001 share-rigging scandal, for which an ex-business partner of his is on trial.
At least 45,000 people attended the inauguration ceremony, to watch 66-year-old Mr Lee succeed Roh Moo-hyun as South Korea's 10th president.
Nicknamed "the bulldozer" for his dogged work at Hyundai and as mayor of Seoul - and his ability to push through unpopular policies - Mr Lee is the first conservative politician to lead the country in a decade.
He is also the first to come from a business background. Most previous leaders were either ex-generals or former rights activists.
In his inauguration speech, President Lee said he would lead South Korea to become an advanced nation and would push to revive the country's economic success.
Addressing the crowds, he said: "Economic revival is our most urgent task."
"We must move from the age of ideology into the age of pragmatism," he said, in a veiled criticism of the past administration.
The new president promised to have stronger ties with the United States and take a tougher line on neighbouring North Korea.
After the South's decade-long "sunshine policy" of engagement with the North - which critics have derided for giving unconditional aid while getting little in return - Mr Lee wants to tie South Korean aid more closely to nuclear disarmament.
South Korea's political transition comes amid an improvement in relations between the US and North Korea.
The New York Philharmonic orchestra is due to perform in Pyongyang on Tuesday, becoming the first major US cultural organisation to go to the isolated nation.