Anwar, 61, read out the oath of office on Thursday morning in the country's lower house of parliament before taking his place as leader of the loose opposition coalition called Pakatan Rakyat (PR), or people's alliance.
On Tuesday Anwar, a member of the opposition Keadilan (justice) party, defeated Arif Shah Omar Shah, the ruling Barisan Nasional's candidate, by a wide margin in the contest for the northern town of Permatang Pauh, the constituency he last held 10 years ago.
On March 8 he led the opposition's general election campaign that saw the alliance win 82 seats, 30 short of a majority that could have seen a change of government since Malaysia gained independence from British rule in 1957.
During Anwar's oath-taking, most of the top cabinet ministers including Abdullah Ahmad Badawi, the Malaysian prime minister, and his deputy Najib Abdul Razak, were not present in parliament.
As an MP, Anwar will now be able to attend the tabling of the annual national budget in parliament by Abdullah on Friday.
Anwar, who was a former deputy prime minister and finance minister, has declared his intention to overthrow the government by next month through defections by disaffected MPs, and vowed to be the next prime minister.
'Plan still on'
|Abdullah is facing mounting pressure from within and outside his ruling party [EPA]
Confirming that his September "plan is still on", Anwar said: "Clearly the prime minister has lost the mandate of the country."
Anwar's convincing victory on Tuesday in his home state of Penang sparked fresh calls for Abdullah, who also hails from the same state, to resign.
Among the loudest was Mahathir Mohamad, Abdullah's predecessor, said the prime minister "must take responsibility and resign now".
Razaleigh Hamzah, a former MP and veteran politician, said Abdullah had lost "what scraps of credibility [he] had left" following Anwar's victory.
But Abdullah rejected the calls, quoted by Bernama national news agency as saying: "I believe we can still continue the government."
His convincing win comes despite a new charge of sexual misconduct for allegedly sodomising a male aide early this year, which he says are politically-motivated.
Under Malaysian law, sodomy is illegal even if consensual, and a conviction could see Anwar jailed for up to 20 years.
Anwar was charged with sodomy and corruption which led to his sacking from government and political office in 1998.
He was later convicted on both charges and served six years in jail before the sodomy conviction was overturned in 2004, but the conviction for corruption remains.
Anwar has maintained that Mahathir, who was his long-time mentor, had framed him in 1998 to prevent a power struggle.