Around the world, a billion Catholics are now wondering where their new Pope will take them.
As a young priest Pope Benedict was regarded as progressive
For those who believe in the traditional values of the Church, the election of Joseph Ratzinger is a blessing.
They know they can rely on him to hold the line against those with an agenda for change.
But those who want to reform the Church may be less happy, as they see him as a man in the mould of John Paul II.
Pope Benedict is firmly opposed to birth control, supports the celibacy of the priesthood, and is against the ordination of women.
He has said that anyone who supports the "grave sins" of abortion and euthanasia should be denied Communion.
Road from radicalism
He has also spoken out against homosexuality, and once denounced rock music as "the vehicle of anti-religion".
Ratzinger's ascent through the Catholic Church began in Germany
In fact there are few Catholic controversies of recent years on which Cardinal Ratzinger did not express his views forcibly.
It may seem hard to believe now, but as a young priest he was regarded as a progressive.
Then as a university professor during the student unrest of the 1960s, he became increasingly conservative.
It was the late Pope who brought the Bavarian to Rome in 1981, and they became close friends.
Cardinal Ratzinger ran the Congregation for the Doctrine of the Faith.
This Vatican department, a descendant of the Holy Inquisition, protects Church orthodoxy.
The job earned him unflattering nicknames such as "The Pope's Enforcer" and "God's Rottweiler".
He has a reputation for stifling dissent, and one of his early campaigns was against "liberation theology" in Latin America.
Some priests became involved in fighting poverty through social action, but to Cardinal Ratzinger it smacked of Marxism.
As a key aide to John Paul II he had a fearsome reputation, but those who know him say he is gentle and somewhat shy.
North and south
The first clue about any pope's intentions is his choice of name.
Cardinal Ratzinger could have called himself John Paul III. It would have been seen as a statement that he intended to continue the work of his mentor.
Instead, he opted for Benedict, which comes from the Latin for "blessing".
The last Pope Benedict reigned during the First World War. He is credited with settling animosity between traditionalists and modernists, and wanted to bring about a reunion with Orthodox Christians.
The new Pope Benedict faces a variety of challenges, not least declining Church attendance and a chronic shortage of priests in many parts of Europe.
Another task is to continue the drive towards better relations with Islam, as the two religions compete for converts in parts of the developing world.
When John Paul II was elected, the focus was on East-West relations, and the Polish Pope was credited with helping to bring down communism.
As the new papacy begins, it is the tension between North and South that is most pressing. Globalisation and debt relief are issues Pope Benedict will be expected to face.
There is some surprise that a key member of the Vatican bureaucracy has been elected pope.
Many cardinals would like to see a less centralised Church, and a less powerful pope who guides rather than governs.
They may have to wait a little longer. Pope Benedict XVI looks like a man who will not be afraid to exercise his powers.