The 48-year-old conservative former mayor of Tehran, deeply loyal to the values of Iran's 1979 Islamic revolution, won a landslide election victory in June and was appointed president by Supreme Leader Ayatollah Ali Khamenei.
"I therefore ... approve the vote of the nation and appoint Dr Mahmoud Ahmadinejad as the president of the Islamic Republic of Iran," said a text by Khamenei, read out at a ceremony by outgoing President Mohammad Khatami.
Ahmadinejad takes the helm as Iran edges closer to possible UN Security Council sanctions over its nuclear programme, which Washington says is a smokescreen for building atomic bombs. Tehran insists its ambitions are peaceful.
After taking office in a ceremony attended by government leaders and foreign ambassadors, Ahmadinejad appealed for an end to weapons of mass destruction in the world.
"I will plead for the suppression of all weapons of mass destruction," he said.
"Iran wants to see the establishment of last peace and justice," he said. "I will work for international justice because the world is starved of justice."
In order to break this impasse, EU diplomats have been trying to get Iran to surrender its nuclear fuel work in return
for economic incentives.
But Iran says that such a compromise is unacceptable and that it will resume part of the nuclear fuel cycle, a move that threatens to end EU mediation.
Iran says it will resume uranium
The foreign ministers of Britain, France and Germany and EU foreign policy official Javier Solana warned of "other courses of action" if Tehran carries through with its threat to resume uranium ore conversion, the first step in the cycle to producing fuel for nuclear reactors.
A Washington-based analyst on US national security affairs, Munzir Suleiman, told Aljazeera that the standoff might not lead to Iran's referral to the UN Security Council.
"There is still room for negotiations ... Ahmadinejad has tried to send a message that open negotiations do not mean dragging your feet in reaching a settlement."
The Paris agreement, Suleiman added, gives Iran technical, economic and political incentives for accepting international monitoring.
"Negotiations might probably reap benefits by next week and in particular that we keep an eye on similar negotiations going on in North Korea in which no threats are directed to refer its file to the UN security council.
"We should also bear in mind that North Korea's nuclear file is much more serious than Iran's," Suleiman added.
Asked if Iran needed to be deterred from uranium enrichment, he said, "The Paris agreement that supported the negotiations pointed out that freezing the uranium enrichment is a voluntary act and not binding to Iran."
"This means that even if Iran was referred to the UN, Iran will not be accused of violating the nuclear non-proliferation treaty. Iran's activities will be acceptable as long as they are monitored by the International Atomic Energy Agency (IAEA)."
"We should also bear in mind that North Korea's nuclear file is much more serious than Iran's"
"There is still time to reach a settlement, but this will not be attainable if the next week passes without agreement," stressed Suleiman
Ahmadinejad, who became Tehran mayor two years ago, has yet to give concrete indications of how Iran will look under his rule.
Branded by his enemies before his 24 June victory as a dangerous extremist, the former revolutionary guard has gone out of his way to vow there will be "no place for extremism" in his government.
Many diplomats and rights groups doubt he will show more conciliation with dissidents or the international community than did the previous administration of Mohammad Khatami, whose efforts at reform were stymied by hardliners.
"I ask if Iran could possibly be more hardline on nuclear policy than it is at the moment," said one diplomat.
Few expect a rapprochement
with the US
"The resumption of these nuclear activities seems to show that there will be continuity in policy."
Ahmadinejad has pledged to extend "the hand of friendship" to the international community and made clear that he is ready to work with any country that does not show animosity to Iran.
Any thoughts that a rapprochement with arch enemy the United States could be on the horizon have been buried by Ahmadinejad's assertion that Iran is strong enough without Washington, along with accusations he took part in the 1979 kidnapping siege at the US embassy in Tehran.
But what reaped Ahmadinejad 61.69% of the votes in his crushing run-off win against government veteran Akbar Hashemi Rafsanjani was his success in convincing Iranians he is an honest Muslim who cares about their economic problems.
Iranians who are more concerned with their weekly pay packets than freedom of the press will be looking to the man who proudly presents himself as the "nation's street sweeper" to put money into their pockets.
Ahmadinejad says he cares about
ordinary Iranians' economic plight
He may be helped by a bumper oil revenues in the current financial year - $24.4 billion more than budgeted - because of high oil prices.
Having initially alarmed economic observers by promising to thwart a "mafia" that was dominating the oil industry, and promising a redistribution of wealth, Ahmadinejad has moved to calm nerves by saying that he is pro-investment.
Ahmadinejad's future policies remain a mystery, but some clarity should emerge when he announces his government line-up. He has two weeks after being sworn in before parliament on Saturday to present the names to the house.