Thaci's inauguration followed his election to the post by MPs in February, in a tense vote marred by opposition tear gas protests in parliament and clashes on the streets of the capital Pristina.
"I swear that I will dedicate all my powers to preserving the independence, sovereignty and territorial integrity of the Republic of Kosovo," Thaci said as he took oath before MPs from the ruling coalition and diplomats.
Later addressing parliament, he said his goals were Kosovo's integration into NATO and the EU and continuing "the process of normalising relations with Serbia".
Opposition members refused to attend Thaci's swearing in because they insist his election was unlawful, claiming irregularities in the vote, but Kosovo's constitutional court dismissed their complaint.
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Thaci, 47, rose to prominence during the 1998-1999 war with Serbia as political leader of the pro-independence ethnic Albanian Kosovo Liberation Army (KLA) and he has since served two terms as prime minister.
But his reputation has been sullied by a 2011 Council of Europe report which accused him of heading a mafia-style network involved in assassinations, unlawful detentions and even trafficking captives' organs during and after the war -- charges he strongly denies.
Thaci, who served as foreign minister before his election as president, has taken a lead role in the talks to improve relations between Kosovo and Serbia, which are a key requirement for both sides to become EU members.
The father-of-one is also accused of corruption by protesters, some of whom took to the streets in February to try and stop him becoming president amid anger over Kosovo's slow development and lack of jobs.