Theofilos on Tuesday succeeded Irineos, who was ousted in May amid allegations he leased church land in east Jerusalem to Jewish groups interested in expanding the Jewish presence there.
The long-term leases enraged the church's predominantly Palestinian flock. The Palestinian Authority claims east Jerusalem as the capital of a future state.
World Orthodox leaders stopped recognising Irineos's authority in May, but he continued to resist demands to step aside, saying a former aide signed the leases without his knowledge. Theofilos, who had been the metropolitan of Tabor in the Galilee, was elected to replace Irineos in August by the church's Holy Synod in a 14-0 vote.
Theofilos had served previously as a Greek Orthodox Church envoy in Qatar and reportedly has close ties to the Greek Orthodox leadership in the United States.
Dozens of black-garbed clergymen marched in a procession on Tuesday morning from the Greek Patriarchate, through the winding streets of the Old City of Jerusalem, to the Church of the Holy Sepulchre. Hundreds of onlookers clapped as Theofilos walked by.
Worshippers at the induction
ceremony in Jerusalem
Theofilos was installed in a ceremony inside the church, which stands over the reputed sites of the crucifixion of Christ and the tomb where he was buried.
Installation of a new patriarch traditionally requires the approval of Israel, Jordan and the Palestinians. Jordan and the Palestinians have approved Theofilos's appointment, but an Israeli committee was still deliberating.