Obama made the appointment of his Cabinet his first official act, and the Senate approved six secretaries and a budget director before the day was over, though Senate Republicans delayed others.
Secretary of State-designate Hillary Clinton had been expected to win approval Tuesday, but Sen. John Cornyn (R-Texas) held her nomination up for a day to permit further questioning about her husband and his charitable foundation's foreign donors.
Others who face a more protracted process include Labor nominee Hilda Solis, Treasury nominee Timothy Geithner, attorney general nominee Eric Holder and Transportation nominee Ray LaHood.
The delays are expected to be temporary.
Obama also still needs to nominate a commerce secretary pick to replace Gov. Bill Richardson, who withdrew from consideration in the midst of a scandal in his home state of New Mexico.
The finality of the transfer of power was signaled in small ways and large. A picture of Bush vanished from the White House Web site shortly after noon, and Obama's portrait appeared in its place.
That Obama was taking office in challenging times, both domestic and foreign, he was quick to acknowledge, including an economic crisis as ominous as any since Franklin Roosevelt moved into the White House amid the Great Depression.
"Our nation is at war, against a far-reaching network of violence and hatred," Obama said. "Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age."
The way out of the domestic morass, Obama said, will require a more active role for government.
Indirectly rejecting Bill Clinton's assertion in 1996 that the era of big government was over, Obama said, "The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified."
On foreign policy, Obama vowed to outlast and ultimately defeat terrorists.
But he went out of his way to extend his hand to the Muslim world.
"To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect," he said.
He also declared that the United States would once more play the role of world leader. "We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan," he declared. "With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.
"Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America — they will be met."
Inauguration Day dawned with hundreds of thousands of people assembling in early-morning darkness to watch the day's events unfold — and to cheer, sing and tell stories.
In the crowd, there was sustained booing of Bush at some points in the program.
At the congressional lunch that followed the Bushes' departure by helicopter, Obama worked the room like a bridegroom at a wedding. When Kennedy was taken ill, Obama reminded the crowd in a halting voice that Kennedy had long been a supporter of equal justice.
"So I would be lying to you if I did not say that right now a part of me is with him," Obama said.
At another point, Michelle Obama joined her husband to review the troops on the steps of the Capitol. When Obama went to shake the hand of the military officer at his side, the president appeared startled when he got a salute instead as the new commander in chief.
But Obama and the new first lady were all smiles and ease as they walked a section of their parade route, the silver collar of Michelle Obama's yellow-gold dress glinting in the afternoon sun. In the evening, the Obamas were to attend and speak at 10 official inaugural balls.
Yet it was the words of the afternoon that resonated beyond their delivery.
The crowd, mesmerized, listened on the back of the West Lawn as the speech rolled across the Mall from a sound system that took two or three seconds to get to the farthest reaches of the crowd.
The echo meant that the field was never quiet, even when Obama paused, as though the words of the day couldn't be contained in a single moment or place.