Erdogan, 60, took the oath in Ankara to begin a five-year mandate in which he has vowed to build a "new Turkey" by pushing through a new constitution and driving on with an ambitious development programme.
Deputies of the opposition Republican People's Party, who accuse Erdogan of violating the constitution, noisily walked out of parliament just before he was sworn in.
Erdogan has made clear he wants to wield genuine executive power as president after becoming the first directly elected head of state, taking 52 per cent of the vote in the August 10 poll.
The election was a triumph for Erdogan - who first become premier in 2003 - after surviving a tumultuous 2013 that saw mass anti-government protests and corruption allegations against his inner circle.
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He will take over as president from Abdullah Gul, a former close comrade and co-founder of the ruling Justice and Development Party, who appears now to have fallen out with the feisty Erdogan and is expected to play no role in the next government.
Heads of state from a dozen nations in Eastern Europe, Africa, Central Asia and the Middle East attended the ceremony, the Anatolia news agency reported.
The US is only sending its charge d'affaires in Ankara, in what some commentators have seen as a clear snub.
Ukraine's President Petro Poroshenko had to cancel his trip due to the advance of pro-Russian forces in the east of his country.
A man clearly with his eye on history, Erdogan's five-year presidential term means he will have ruled Turkey longer than its modern founder Mustafa Kemal Ataturk, who established the republic out of the ruins of the Ottoman Empire.