In pictures: Spiritual rituals
Morales speech excerpts
"I wish to tell you, my Indian brothers, that the 500-year indigenous and popular campaign of resistance has not been in vain," Mr Morales, an Aymara Indian, said during an emotional speech.
We must change with votes not bullets
Evo Morales, Bolivian President
"We're taking over now over the next 500 years. We're going to put an end to injustice, to inequality."
The 46-year-old former llama herder and coca leaf farmer said the free-market model did not work in Bolivia, and that the privatisation of basic services and natural resources should be reversed.
"When we talk about recovering the territory we are talking about recovering the natural resources, and these need to be in the hands of the Bolivian people and the Bolivian state," he said.
He also acknowledged the magnitude of the task during his five-year term, as Bolivia still remains South America's poorest country, correspondents say.
Mr Morales is a fierce critic of the US and sees his election as a triumph for indigenous peoples.
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Bolivia's Morales Urges Unity, Strength:
To roars from the crowd of tens of thousands, Morales _ the first Indian to be elected as Bolivia's president and a fierce critic of the U.S. _ called his landslide election a victory for indigenous populations around the world, saying it was evidence that poor countries can rise up to challenge richer ones.