Kabila, 35, was sworn in by the magistrates of the Supreme Court outside the presidential palace with thousands of onlookers shading themselves from the sun under umbrellas in the national colors of blue, red and yellow.
Kabila took his oath after a series of prayers from different faiths — including Muslim, Christian and the indigenous Kimbanguist Church.
"This moment marks the beginning of a new era that must bring well-being and development to Congo's people," Kabila said. "I see a Congo where the people are always able to work.
"The Congo of tomorrow, I see it as a bringer of order to all of Africa," he said.
Rich in cobalt, diamonds, copper, gold and other minerals, Congo gained independence from Belgium in 1960 and was ruled for 32 years by Mobutu Sese Seko, a dictator who plundered the nation's wealth, pocketing billions. Kabila's father helped depose Mobutu, but was then assassinated, leaving his son in power.
The younger Kabila signed peace accords to end 1998-2002 wars that drew in the armies of at least six countries, and established the national-unity government he heads. Since then, the vast country has been trying to organize elections and progress to a democratic government, but has been hampered by logistical delays and continued fighting.
A series of conflicts and street clashes that have marred the transition and the election — often with units of the army battling each other. But the violence never fully derailed the process started four years ago.
Kabila won a close October run-off election against Jean-Pierre Bemba, a former warlord and one of four transitional vice presidents.
Most of Bemba's personal guard has been garrisoned about 50 miles outside of the capital since the victory was formalized by the Supreme Court Nov. 27, a precaution against fighting after forces loyal to Kabila and Bemba battled before the election.
Bemba had contested the results and was not present at the inauguration. In his speech, Kabila confirmed the right of political opponents to organize under Congo's constitution.