Zardari, the controversial 53-year-old widower of slain opposition leader Benazir Bhutto, was sworn in at a closely-guarded ceremony at the presidential palace in the capital Islamabad.
Asif Ali Zardari is flanked by his Daughters as he speaks shortly after his presidential election victory on September 6.(AFP Photo)
He secured a large win in a poll among lawmakers Saturday, and is now the 14th president in the short but often turbulent history of the world's only nuclear-armed Islamic state and frontline US "war on terror" ally.
Zardari -- who spent 11 years in jail on a variety of charges ranging from corruption to murder, but was never convicted -- succeeds Pervez Musharraf, the former army general who resigned on August 18 under threat of impeachment.
"I will bear true faith and allegiance to Pakistan," Zardari said, reciting the oath of office administered by the country's chief justice in a ceremony broadcast live to the nation, as his three children looked on.
"May Allah Almighty help and guide me, amen," he concluded, sitting down to loud cheers of "Long live Bhutto," and "Bhutto is alive".
Afghan President Hamid Karzai joined Pakistani government leaders, military top brass, judges, diplomats and high-ranking civil servants at the ceremony.
Security around President House, which is situated in the already high-security zone of Islamabad, had been further fortified ahead of the inauguration, officials said.
Zardari was to speak to reporters later Tuesday and was expected to outline his vision for Pakistan, including his plans to counter extremism and turn around an economy beset by rampant inflation and a plunging stock market.
As co-chairman of the PPP, Zardari already heads a fragile coalition government which recently lost the backing of the party of former prime minister Nawaz Sharif.
His inauguration comes amid mounting international concern about the stability of Pakistan , which under Musharraf backed the United States after the September 11 attacks in 2001 in its subsequent invasion of Afghanistan.
Billions of dollars of aid flowed to Islamabad in return.
But around 1,200 people have died in bombings and suicide attacks across the country in the past year, in violence attributed to a backlash against Musharraf's support for Washington.
The violence was underscored during Saturday's election when a suicide car bomber rammed a police checkpost in the northwestern city of Peshawar, killing 33 people and wounding more than 80 others.
Zardari has said he expects to be targeted by extremists such as those who killed his wife at a campaign rally in December.
US President George W. Bush was to describe Pakistan later Tuesday as a major battleground in the "war on terror", along with Iraq and Afghanistan.
"They are all theatres in the same overall struggle. In all three places, extremists are using violence and terror in an attempt to impose their ideology on whole populations," Bush was to say, according to an advance text.
His message comes amid media reports of multiple recent strikes inside Pakistan by US or international troops based in Afghanistan, which accuses its neighbour of abetting or at least turning a blind eye to cross-border violence.
"Defeating these terrorists and extremists is in Pakistan's interest because they pose a mortal threat to Pakistan's future as a free and democratic nation," Bush was to say.