From 6am local time, it became an offence to smoke in nearly every enclosed public place in Scotland, enforced by a fine of 50 pounds (A$122) on smokers and a 200 pounds (A$492) penalty on businesses.
"This is the single biggest measure that we could take to improve public health in Scotland," said Scotland's First Minister Jack McConnell.
"I think it will transform the culture of Scotland for future generations."
He said Scotland had an "appalling record" on heart disease, strokes and cancer and a radical change in its pub culture was necessary to cure it.
It is estimated that tobacco use kills about 13,000 Scots annually and that passive smoking claims 1,500 and 2,000 lives every year in Scotland.
Exempt from the ban are designated rooms in some workplaces, adult care homes, hospices, offshore installations and submarines.
Smoking will also be allowed in police detention rooms and in designated hotel bedrooms.
Farewell parties
The ban in Scotland follows that taken by trailblazer Ireland as well as Italy, Malta, Norway, Spain and Sweden. England and Northern Ireland are due to implement similar bans next year. Wales is also to follow suit.
Smokers held farewell-to-smoking parties in pubs and restaurants on Saturday night as they prepared for the biggest change in Scottish public health policy in decades.
Almost 300 businesses across Scotland have lodged planning applications this year alone for shelters, canopies or beer gardens to make last-minute alterations in the run-up to the ban.
The Scottish Executive has set new targets to reduce the number of adult smokers by almost 186,500 by 2010 and record numbers of Scots are said to be preparing to quit as the ban comes into force.
Smokers' groups have condemned the executive, accusing ministers of misleading the public over the health impact and economic costs.
The Scottish Licensed Trade Association, which had called for a partial ban, fears 140 pubs could close and 2,500 jobs may be lost.
A BBC radio poll of 1,000 smokers in Scotland suggested that more than a fifth planned to carry on lighting up regardless.
The poll found that smokers in their teens and early 20s were most likely to ignore the ban and that men were more likely to flout the law than women.
But it also found that 37 percent of non-smokers said they were now more likely to visit pubs and restaurants.