Ex-army chief Abdel Fattah al-Sisi, who ousted Egypt's elected Islamist leader, warned there will be "no leniency" for acts of violence, in his first address as the country's new president.
The retired field marshal became Egypt's second elected president since a popular uprising overthrew longtime strongman Hosni Mubarak in 2011, unleashing more than three years of unrest.
Hours after being sworn in, Sisi vowed in a televised address to the nation to work toward "reconciliation" but not with those who have "shed blood".
Since Sisi ousted president Mohamed Morsi last July, interim authorities have crushed his Muslim Brotherhood movement, jailing its leaders and putting them on trial.
In a warning to the now blacklisted Brotherhood which swept all elections since Mubarak's fall, Sisi said there will be "no leniency and truce with those who resort to violence".
"I am looking to a new era built on reconciliation and tolerance.. except with those who committed crimes or used violence as a tool," he said.
"I am saying clearly that those who shed the blood of the innocent and killed ... the sons of Egypt, they don't have a place in (our) march."
At Sisi's inauguration earlier on Sunday, Western countries alarmed by the brutal police crackdown on dissent were represented mostly by low-level representatives.
In a speech to Arab royals, foreign dignitaries and Egyptian public figures at the presidential palace after the ceremony, Sisi said it was time "for our great people to obtain the fruits of their two revolutions".
"The time has come to build a more stable future," he said, before signing a power transfer with outgoing interim president Adly Mansour, whom Sisi had installed after toppling Morsi.
Many Egyptians view Sisi as the leader best equipped to restore stability.
He scored a lopsided victory in a vote boycotted by Muslim Brotherhood and secular dissidents, both targeted by the army-installed government.
The Islamist Anti-Coup Alliance which supports Morsi said the military had been "wasting the money of the poor in festivities and celebrations".
Soldiers and police deployed in force around Cairo to head off protests by the battered Brotherhood and possible militant attacks. No violence was reported.
Hundreds of Sisi supporters celebrated by setting off fireworks at the capital's Tahrir Square, with its entrances guarded by army armoured cars.
Sisi took his oath at the Constitutional Court, next to the hospital where Mubarak, 86, is being detained after having been convicted of corruption.
Elite policemen stood guard outside the court as helicopters dropped posters of Sisi on well-wishers who turned up to see the former army commander.
"I'm here to congratulate Sisi, the man who rescued us from terrorism and the Muslim Brotherhood," said one flag-waving supporter, Amira Ahmed.
Riding a wave of popularity since Morsi's overthrow, Sisi won the May 26-28 election with 96.9 per cent of the vote against his sole rival, leftist leader Hamdeen Sabbahi.
- Stability and economy -
The nature of his election victory showed Sisi still enjoyed immense support for his overthrow of the divisive Morsi, after millions held protests demanding an end to the Islamist's turbulent year in power.
But the lower than anticipated turnout of about 47 per cent denied him the overwhelming mandate he had called for ahead of the vote.
Sisi's main challenges will be to restore stability and revive the economy after the turmoil that has followed the 2011 uprising.
Since Morsi's ouster, the crackdown on his supporters has killed more than 1,400 people and left thousands behind bars, while militant attacks left hundreds of policemen and soldiers dead.
Sisi's opponents fear that under his rule Egypt will return to an autocratic regime, worse than under Mubarak.
In the run-up to the election, Sisi said that "national security" takes precedence over democratic freedoms.
Sisi became the fifth Egyptian president to rise from the ranks of the military, reasserting the army's grip on political life.
Saudi Arabia's King Abdullah, who opposed the Brotherhood, called for a donor conference to help Egypt after the results were announced.
But Washington voiced concerns about "the restrictive political environment" during the vote, urging Sisi to show "commitment to the protection of the universal rights of all Egyptians".