Monday's long-anticipated announcement comes as e-books remain a sliver of overall book sales, partly because they lack the comfort and intimacy of bound paper.
Amazon Chief Executive Jeff Bezos said the online retailer spent three years developing the Kindle reader, which the company is selling online for $399.
Rather than try to "outbook" the bound book, Bezos said, Amazon designed Kindle with the e-book's strengths in mind.
It is thinner than most paperbacks and weighs 10.3 ounces. Yet it can hold some 200 books, along with newspapers, magazines and an entire dictionary.
Readers can buy and download books directly to the Kindle -- without a PC -- through Sprint Nextel Corp.'s high-speed EV-DO cellular network without fees or contract commitments. They also can take notes on what they read and store them on Amazon's servers.
Kindle users can turn off wireless connectivity when they are on airplanes -- though they also must shut off the device during takeoff and landing -- prime reading time for some.
Sony Corp. already offers an e-book reader that imitates the look of paper by using an innovative screen technology.
The Kindle screen takes a similar approach and has no backlight to reduce battery use and eyestrain. Bezos said Amazon decided to make its own device so it could seamlessly build a service around it.
Best sellers and new releases will typically go for $9.99.