Salva Kiir, the leader of south Sudan's former rebel group the SPLM, has been sworn in as the first elected president of the semi-autonomous southern region.
It follows his landslide victory in April's elections, part of the peace deal that ended a 21-year civil war between north and south.
Next year, the people of Southern Sudan will vote on possible independence.
A BBC correspondent in Juba says it is widely believed that, given a free poll, they will vote in favour.
Most of Sudan's lucrative oil is in the south, and the exact boundary with the north still has to be defined.
'Battle for unity'
The BBC's James Copnall in Juba says Mr Kiir is more of an old soldier than a natural politician.
But in becoming south Sudan's first elected president Mr Kiir faces huge political challenges, he says.
The region is one of the least developed on Earth - one of the reasons for long civil war that ended in 2005.
At his swearing-in ceremony, where dancers, dressed in beads and ostrich feathers, joined the celebrations, Mr Kiir did not advocate directly for either independence or continued unity.
But he did say the battle for unity has almost been lost - a heavy hint about which way he thinks southerners will vote - directly criticising President Omar al-Bashir's National Congress Party.
"Our partners in the National Congress Party were not in a hurry to take concrete measures to keep Sudan united.
"The entire interim period has thus been allowed to lapse without serious and meaningful actions to achieve that goal. Now that time has practically run out, a sense of panic seems to be setting in as people realise that the battle for unity is about to be lost."
Our reporter says the remarks would not have pleased Ali Osman Taha, Sudan's second vice-president, who represented Khartoum at the ceremony.
But the bulk of Mr Kiir's speech set out his agenda and governing philosophy for the next five years.
He admitted he had made mistakes in the five years he has, in effect, run the south.
He also promised to cut down on corruption, and to increase the percentage of women in every level of government.
Mr Kiir's Sudan People's Liberation Movement has had to turn from a fighting force to one that governs.
He was keen to stress there was no chance of a return to north-south war.
"We shall never allow ourselves to be driven back to war," he said.
Many inside and outside of Sudan are worried that the tensions linked to the referendum, and the fact the south has much of Sudan's oil, could lead to a new civil conflict.