Crowds of more than 30,000 gathered at the Union Buildings in the country's capital Pretoria to hear Mr Zuma, 67, take the oath of office and pledge to help South Africans realise their dreams.
But as past and present African heads of state - from Nelson Mandela to Colonel Muammar Gaddafi of Libya - looked on, he took a sober view of the country's economy which may already be in its first recession in 17 years.
"We must acknowledge that we find ourselves in difficult economic times," he declared. "Jobs are being lost in every economy across the world.
"We will not be spared the negative impact, and are beginning to feel the pinch."
A total of 29 heads of state and government were due to attend, including Robert Mugabe of Zimbabwe.
Mr Zuma was elected president by members of Parliament on Wednesday, after the ANC won the general election in South Africa two weeks ago.
Flanked by stuffed lions and antelope, he took to the podium in the Union Building's amphitheatre to be sworn in to office.
It marked the culmination of a remarkable journey for Mr Zuma, who was born 67 years ago in a remote village in rural KwaZulu-Natal.
His political ambitions seemed over when he was sacked as deputy president in 2005, following the conviction of his financial adviser for soliciting bribes for him.
Related charges against Mr Zuma have twice been dropped on technical grounds, he has been acquitted of rape, and he was finally formally elected president earlier this week, having led the African National Congress to victory at the general election with 65.9 per cent of the vote.
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