The new leader of Liberia, Gyude Bryant, swore his allegiance and pledged to enforce the peace agreement which promises a new start to this country.
By Paul Welsh
BBC correspondent in Monrovia
Then he kissed the bible he had sworn his oath on.
The guests were perched on plastic garden furniture because government militia looted the parliament building in the latest fighting.
Gyude Bryant has pledged openness and accountability
The ceremony was punctuated by the sound of those chairs breaking - the great and good of this country falling to the floor.
It was a reminder to them all of how badly their country has been damaged by the long war and how much there is to do in Monrovia.
The festive atmosphere of the early moments of the ceremony was quickly replaced by the sombre mood of history being made - of a new start for a country destroyed by war.
Mr Bryant said it was time to move from greed and corruption to openness and accountability - from bickering and tribalism to diversity and inclusiveness.
The biggest United Nations peacekeeping mission in the world is being put together and the UN Secretary General, Kofi Annan, sent a message that this was a day of hope.
President Obasanjo of Nigeria told those gathered in the building, that previous attempts to find peace had failed because there had been politics of exclusion.
Now the people have a second chance.
But the man leading the UN mission, Jacques Klein, has warned that there will be more suffering before there is a lasting peace in Monrovia.
"The thieves out there, the murderers, the gangsters, the belligerent of one kind of another, realise time is running out, so you actually may see an increased level of violence in the rural areas," said Mr Klein.
Teams organised by the United Nations have also been clearing the streets of rubbish after months without public services and following years of war.
But if the changes in the short term have been big, the challenges in the long term will be bigger.
There are 45,000 fighters to disarm.
About half of them are children - children who have been traumatised, who have missed out on school and who have learned little, but killing and stealing.