Washington - Barack Obama was sworn in on Tuesday as the 44th president of the United States, making history as the first African American to hold the job while taking control of a country facing a major economic crisis and daunting challenges abroad.

Obama, 47, took the oath of office shortly after noon at the steps of Congress in front of millions of onlookers who braved sub-freezing temperatures along the National Mall, a vast park that stretches from the Capitol building to the Lincoln Memorial.

Obama recited the oath read by Supreme Court Chief Justice John Roberts, followed by a rendition of "Hail to the Chief," before he stepped to the podium to give his inaugural address.

Tears and cheers accompanied the moment in the crowd.

During the swearing-in, he used his full name, Barack Hussein Obama, an open gesture of recognition of his Muslim father, who was Kenyan, and a facet of his background that was underplayed during his election campaign against Republican John McCain.

Obama laid his hand on a Bible used in 1861 by president Abraham Lincoln, the Civil War president who freed the slaves. Lincoln's 200th birthday is being celebrated this year and has formed a keystone of the inaugural theme.

Standing nearby was outgoing president George W Bush, who leaves office as one of the most unpopular presidents in recent times. When he walked out on the stage, a loud boo went up from the crowd.

Earlier, Obama and wife Michelle along with vice president-elect Joe Biden and his wife, Jill, attended church. The Obama couple joined President George W Bush and First Lady Laura Bush at the White House for the traditional coffee. They travelled together to the ceremony outside Congress.

Former presidents Jimmy Carter, George HW Bush and Bill Clinton and their wives looked on as the nation celebrated the historic moment.

Obama takes office amid high expectations that he can turn around the economy that shed more than 1 million jobs last year and is bogged down in the worst recession since the Great Depression of the 1930s. Obama inherits wars in Iraq and Afghanistan and a bruised US image in the world after eight years of the Bush presidency.

"Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America," Obama said.

Obama's message of change and hope propelled him to the presidency, but in the days leading up to the inauguration he has tried to dampen expectations of immediate results. He has warned the economy will likely "get worse before it gets better."

Obama has already begun consulting with members of Congress on a 825-billion-dollar stimulus plan to boost the economy by investing in infrastructure projects, developing alternative energy and other projects to get people back to work.

Among the first acts Obama is expected to take is ordering the closure the Guantanamo detention centre at the US Navy base in Cuba for holding suspects in the war on terrorism. The prison, where most of the remaining detainees have been held for years without charges, has tarnished America's standing in the world. Obama has cautioned that the actual closure took take months or as long as a year.

Revellers travelled to Washington from all over the United States and the world to witness history. Many began flocking to the Mall well before sunrise amid some of the tightest security the nation's capital has ever seen.

"I could have seen this on TV but I wanted to be here to see hope, change and history in the making," said Yvonne Gill, 43, a nurse from Notre Dame, Indiana.

Barriers were set up all around the downtown area to block vehicle traffic as the crowd took to the streets and waited in long lines to claim a spot in the bleachers along the parade route Obama will take along Pennsylvania Avenue to the White House.

Members of Congress handed out as many as 240,000 tickets for seating and close-in standing areas to their constituents who came to town. Potentially millions more spectators without tickets will be able to watch from greater distances along the length of the mall or on giant video screens.

Cynthia McNeal, 50, an African American office secretary from North Carolina, said she came to honour her parents and the 1960s struggle for civil rights led by Martin Luther King Jr.

"I'm here to witness history," McNeal said.

As much as the enthusiasm on the streets was an outpouring of support for Obama, it was also a sign people were ready to move on from Bush, who is leaving office with the lowest job approval rating in decades.

"Goodbye Bush, Goodbye Bush," Metro riders continuously chanted at one exit station near the festivities.

Obama will spend Tuesday evening attending various black tie inaugural balls throughout the city, then will get down to the nation's business during his first full day of office on Wednesday, when he will meet with his top economic advisers.

On Thursday, Obama is expected to meet with General Ray Odierno, the top commander in Iraq, and General David Petraeus, chief of US Central Command, which oversees military operations in the Middle East, South Asia and parts of Africa, CNN reported.