Chief Justice John Roberts administered the oath of office yesterday in the Blue Room of the White House.
First Lady Michelle Obama, their daughters Sasha and Malia and a few reporters witnessed the ceremony.
Mr Obama will take the oath again today during a public swearing-in ceremony at the Capitol in front of hundreds of thousands of people.
Vice-President Joe Biden was also sworn in for his second term in office, in a small ceremony at the US Naval Observatory, the Vice-President’s official residence. Surrounded by family, Mr Biden took the oath of office from Supreme Court Justice Sonia Sotomayor.
In his second term, Mr Obama will be leading a country more divided than ever before.
He will have to face battles on the economy, foreign policy and gun control, while keeping a watchful eye on the problems in the Middle East and North Africa.
The president – who has already made history by becoming the first African-American leader of the United States – will need to do more to have a lasting political legacy.
With a huge national debt, high unemployment, a floundering economy and the gap between left and right in Washington DC and further afield at its widest, there is an ever-increasing to-do list waiting on the desk in the Oval Office.
After sailing into office four years ago on a wave of hope and optimism, Mr Obama expended much political capital on his controversial healthcare insurance measures, known as Obamacare.
The reforms were widely loathed by Republicans, but with control of the House of Representatives and the Senate, he pushed through his divisive plan.
Mr Obama also made sweeping reforms to Wall Street practice, overturned a law banning openly gay soldiers serving in the military and rescued the auto industry from the brink of collapse.
Arguably his greatest achievement, however, was sending a team of elite commandos to Pakistan to kill the world’s most wanted man, Osama bin Laden.
But as his time at the top reaches its halfway point, he knows his place in history depends on the next four years.
Sharon Manitta, a spokeswoman for London-based Democrats Abroad, said Mr Obama’s first term taught him how to be the most powerful man in the world, and now he needs to implement it.
“In the first four years you are learning so much,” she said, “and I think now we’re going to see the president take that education into action.”
Top of his list is the economy. After a nail-biting race to the December 31 fiscal cliff, a deal was struck to prevent another recession and further economic misery.
Meanwhile, he has pledged to do everything in his power to push through legislation on gun control in the wake of the massacre at Sandy Hook in Connecticut, which left 26 people dead. The measures include improved background checks and bans on the sale of high-powered assault rifles and large magazines, which were used at Sandy Hook and at a shooting at a Colorado cinema.
The issue has riled the powerful National Rifle Association, and highlighted the chasm between the left and right wings of the country.