Prince Albert II of Monaco was officially proclaimed ruler of the tiny Mediterranean principality in a day of celebrations beginning with a Mass.
Prince Albert was joined by his family for the occasion
The 47-year-old was joined by sisters Caroline and Stephanie for the solemn service at the cliff-top cathedral.
The family then walked the short way to the palace for an afternoon of parties culminating in a firework display.
The day threatened to be overshadowed by his recent admission of having a 22-month-old illegitimate child.
He confirmed the news as the three-month mourning period for his father Prince Rainier came to an end.
But the focus on Tuesday - declared a national holiday - was firmly on Prince Albert's enthronement.
Banners of the national colours, red and white, adorned windows and buildings across the city.
Cries of "Long live Prince Albert" greeted him as he descended the steps of the cathedral to a small crowd.
Earlier, Monaco's archbishop, Monsignor Bernard Barsi, delivered his blessing.
"We praise God for our new prince of Monaco, whom we receive ... as a gift," he said.
An open-air ball and firework display were then to be held, and the mayor was due to symbolically hand over the keys of the city to the prince.
The day was billed as a "family" affair for Monegasques. A more formal ceremony is to be held in November with foreign heads of states.
French President Jacques Chirac was among the first to send his congratulations.
"Your reign inaugurates the coming of new relations between our two countries," he said.
Tuesday's ceremonies come amid the latest revelations to rock the Grimaldi dynasty, which has ruled the statelet for some 700 years.
In an interview on French television on Monday, Prince Albert, 47, discussed his illegitimate baby son, Alexandre.
Monegasques and tourists enjoyed a day of festivities
He also suggested that other paternity suits were a possibility.
Until recently the tall, balding Albert was the least scandal-prone member of the family, unlike his sisters Princess Caroline and Princess Stephanie, says the BBC's Caroline Wyatt in Paris.
He was a bachelor who kept his private life private, despite rumours of liaisons with models and actresses.
Then a French air hostess originally from Togo revealed in Paris Match magazine that Albert was the father of her 22-month-old son, Alexandre, and published photos of Albert with the baby.
In Monday's interview, Prince Albert said he was shocked at the way Alexandre's existence had been revealed.
His illegitimate son will not be able to inherit the throne, although Prince Albert has acknowledged paternity and assumed his financial responsibilities.