Cameron, 39, defeated David Davis, 56, the experienced opposition home affairs spokesman in a ballot of the party's roughly 260,000 members, officials announced on Tuesday.
Cameron is the fifth Conservative leader in eight years and takes over after three straight election losses.
But Conservatives are hoping for a change in fortunes as the ruling Labour party's popularity is waning and Blair has said he will not fight a fourth election.
A self-styled moderniser who says the party must adopt a more caring approach, Cameron could have more than four years before the next election to make inroads into Labour's lead.
Supporters believe Cameron can widen the party's appeal to voters in the centre ground. Critics say he is strong on rhetoric but weak on policy plans.