"My fellow Americans, we are made for this moment, and we will seize it - so long as we seize it together," said Obama after taking the oath just before noon in a spectacular inaugural ceremony.
"America's possibilities are limitless, for we possess all the qualities that this world without boundaries demands: youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention," he said.
An estimated 700,000 flag-waving people crowding the national mall and millions more at home watched on television as he took the oath on the steps of US Capitol's West Front, dressed in red, white and blue, from Chief Justice John Roberts.
Extolling the importance of democracy across the world, Obama said: "America will remain the anchor of strong alliances in every corner of the globe."
"For no one has a greater stake in a peaceful world than its most powerful nation," he said outlining the vision for his second term which formally began at noon Sunday on the constitutionally mandated date of Jan 20.
Calling for the need to "answer the call of history" in tackling the debates and problems of the era, Obama said: "You and I, as citizens, have the power to set this country's course."
"With common effort and common purpose, with passion and dedication, let us answer the call of history and carry into an uncertain future that precious light of freedom," he said.
Obama took the oath Monday on two bibles, one which his idol Abraham Lincoln used for his first inauguration in 1861 and the other, a "travelling Bible" of legendary American civil rights leader Martin Luther King Jr, to take the oath a second time in two days.
Monday's ceremony was steeped in symbolism as the two bibles represented for the son of a Kenyan father and an American mother "two people whose shoulders he's standing on" for the inauguration.
It also carried added symbolic resonance as the second swearing in of America's first black president came 150 years after Lincoln's emancipation proclamation and almost 50 years since King's famous "I have a dream" speech.
(Arun Kumar can be contacted at arun.kumar@ians.in)
