Reid succeeds Sen. Tom Daschle, who was defeated for re-election on Nov. 2 in South Dakota.
The 64-year-old Nevadan, who has long served as Daschle's second-in-command, was elevated to leader in a closed-door meeting of Democrats who will serve in the Senate in the Congress that convenes in January.
Sen. Dick Durbin of Illinois was unopposed to replace Reid as the party's whip, the Democrat's second-ranking Senate leader.
Daschle has served as party leader since 1995, leading Democrats in periods in which they were in the minority, the majority and then back again.
There were other reminders of the Nov. 2 election as Democrats met in a historic room in the Capitol. Aides to Sen. John Kerry of Massachusetts waited outside the chamber, indicating that the Democratic presidential candidate had picked up his Senate duties after losing his bid for the White House.
Reid takes command of a party that will have only 44 seats when the new Congress convenes in January, fewer than at any time since Herbert Hoover sat in the White House, according to records on the Senate's Web site.
With the exception of abortion rights and gun control, both of which he opposes, Reid's recent voting record on major issues puts him in the mainstream of Senate Democrats.
"My senators who support me know who I am. No one has to guess where I stand on issues," the Westerner said in a recent interview. "I'm going to do what I think is right."
Reid, a veteran of 22 years in Congress, voted against President Bush's tax cuts in 2001 and opposed the final version of the administration's landmark Medicare overhaul legislation in 2003.
Like a majority of Democrats, he voted to give President Bush authority to use military force to oust Iraq's Saddam Hussein, and voted many months later to spend $87 billion to help pay the costs of military actions in Iraq and Afghanistan.
Earlier this year, he helped bottle up a proposed constitutional amendment to ban gay marriages, and sided with organized labor when it sought to make sure no worker lost overtime rights under new administration regulations.
He's also worked with environmentalists to block oil drilling in the Arctic National Wildlife Refuge.
As well, he's been a loyal supporter of Democratic filibusters against 10 of Mr. Bush's judicial nominees deemed extremists by a coalition of civil rights, women's and other groups.
An early test of Reid's strategy is likely to come on judicial appointments, and already, there is some pressure on him to stay the course set by Daschle.
"I would think that Senator Reid and a number of Democratic senators and hopefully some moderate Republicans this time would continue that strategy," said Ralph Neas, head of People for the American Way, which worked to block several of Bush's appointments to the courts.
Reid has given little or no public indication of his intentions, saying he wanted to wait until he had been elected to replace Daschle as Democratic leader. Daschle, defeated in his bid for a fourth term, has served as party leader for 10 years.
While Democrats lost seats this fall, they have more than the 41 votes needed to block Bush's legislation or his judicial appointments if they remain united. At the same time, some Democrats have said their party will have to pick its fights more carefully.
On the home front, Reid is a fierce opponent of the effort to build a repository for nuclear waste at Yucca Mountain in his home state, and has used his seat on the Appropriations Committee to battle the administration.
Reid was first elected to the House in 1982, then won his Senate seat in 1986. Six years ago, he nearly lost a campaign for re-election, prevailing by only 428 votes. He won his fourth term far more easily two weeks ago.
Durbin, who celebrates his 60th birthday next week, served 14 years in the House before winning his Senate seat in 1996. He was re-elected in 2002 with 60 percent of the vote.
A measure of Reid's certain grip on the party's leadership was his announcement Tuesday that he had tapped Sen. Charles Schumer of New York to head the Democratic Senatorial Campaign Committee. In taking the post, Schumer said he would not run for governor of his home state in 2006.
"Senator Schumer is tough, focused and a formidable fund-raiser," Reid said in a statement.
Democrats have a major challenge as they try to regain the majority two years from now. They must defend 17 of 33 seats on the ballot in 2006, compared with 15 for Republicans. The term of Sen. James Jeffords, I-Vt., also expires.
Democrats also were electing Michigan Sen. Debbie Stabenow as caucus secretary.