As dignitaries watched under a red-carpeted tent at the State House complex, Mugabe held a Bible and stood before a red-robed, white-wigged judge to swear to uphold his nation's laws "so help me God." He then sat amid cheering to sign documents.
"The inauguration is meaningless," Morgan Tsvangirai, leader of the opposition Movement for Democratic Change, told Associated Press Television News. "The world has said so, Zimbabwe has said so. So it's an exercise in self-delusion."
The 84-year-old Mugabe, Zimbabwe's leader since independence from Britain in 1980, was expected to depart almost immediately for an African Union summit that opens Monday in Egypt.
There, he can expect to come under pressure from under African leaders to negotiate a power sharing agreement with Tsvangirai, who said he believed members of ZANU-PF party were ready for talks.
"I think that the reality has dawned on all the elites in ZANU-PF," Tsvangirai said. "Without negotiating with the MDC this is a dead-end."
African and other world leaders have condemned the election, in which Mugabe was the only candidate. Human rights groups said opposition supporters were the targets of brutal state-sponsored violence during the campaign, leaving more than 80 dead and forcing some 200,000 to flee their homes.
Residents said they were forced to vote Friday by threats of violence or arson from Mugabe supporters who searched for anyone without an ink-stained finger - the telltale sign that they had cast a ballot.
Tsvangirai had withdrawn from the race because of the violence, though his name remained on the ballot and his supporters may have spoiled their ballots rather than vote for Mugabe.
The electoral commission said total results showed more than 2 million votes for Mugabe, and 233,000 for opposition candidate Morgan Tsvangirai. Turnout was put at about 42 percent, and 131,000 ballots had been defaced or otherwise spoiled, apparently as an act of protest.
In the opposition stronghold of Bulawayo, official results showed Mugabe got 21,127 votes and opposition candidate Morgan Tsvangirai had 13,291, while 9,166 ballots were spoiled.
A high number of spoiled ballots had been noted earlier Sunday by Marwick Khumalo, a member of parliament from Swaziland who led a team of election observers from across the continent under the auspices of the AU-sponsored Pan-African Parliament.
Khumalo said some ballots were defaced with "unpalatable messages." He refused to elaborate, but left the impression the messages expressed hostility toward Mugabe, who has been accused of ruining Zimbabwe's economy and holding onto power through fraud and intimidation.
Tsvangirai won the most votes in the first round of presidential voting in March, but not enough for an outright victory. Official results were not released for more than a month after that vote.
In recent days, African mediators have been pushing for Mugabe and Tsvangirai to negotiate a power-sharing agreement.
Mugabe said on the eve of Friday's vote that he was open to talks but pressed ahead with the election, apparently hoping a victory would give him leverage at the negotiating table.
Khumalo, the observer, urged African and regional leaders to "engage the broader political leadership in Zimbabwe into a negotiated transitional settlement."
With the election discredited and attention turning to the possibility of negotiations, the role of Mugabe in any future government could be a sticking point.
Tsvangirai said in an interview with The Sunday Telegraph of Britain that Mugabe might be allowed to stay on as ceremonial president of a transitional government, with himself as executive prime minister.
"It's being considered within our structures," the paper quoted Tsvangirai as saying.
Mugabe, 84, was once hailed as a post-independence leader committed to development and reconciliation. But in recent years, he has been accused of ruining Zimbabwe's economy and holding onto power through fraud and intimidation.
The official inflation rate was put at 165,000 percent by the government in February, but independent estimates put the real figure closer to 4 million percent.
Since the first round of elections, shortages of basic goods have worsened, public services have come to virtual standstill, and power and water outages have continued daily.