The takeover of oilfields by the army's engineering corps was announced by the top military command moments after the president announced a formal decree nationalising the country's petroleum operations, which had been expected.
"The state is recovering its property, the possession and total and absolute control of these resources," Mr Morales said at a May Day speech at San Alberto gas field in southern Bolivia.
Moments later, the president called on the country's "patriots" to "mobilise against any effort by any company to sabotage" the nationalisation.
The left-wing leader stated that the move would be a "true nationalisation" that would help the economy and generate additional jobs in Bolivia, where 70 percent of the population lives in poverty.
Mr Morales said foreign energy companies would have to agree on new contracts with the state-run oil firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), within 180 days.
Dramatic revenue increase
During the transition period, the state firm would receive 82 percent of the revenues from any operations, with the oil companies getting the remaining 18 percent.
Mr Morales indicated that "only companies that respect these new terms will be allowed to operate in the country" after the 180-day transition period.
"At the end of this period, companies that do not sign new contracts will not be able to operate in the country," he added.
Officials said the army was to assume control of the 56 oil installations in the country.
The deployment of troops "seeks to ensure the functioning of oil facilities to guarantee the normal supply of energy in accordance with international agreements as well as to fulfill domestic needs," an army statement said.
Mr Morales was elected in December on a pledge to take a bigger share of earnings from Bolivia's energy industry, which accounts for about 15 percent of its economic output.
Bolivia has the second highest natural gas reserves in Latin America, with an estimated 54 trillion cubic feet. The country produces a modest 40,000 barrels per day of crude oil.
Oil prices rise
The measure is expected to affect about 20 foreign oil companies, including Spain's Repsol, Petrobras of Brazil, Britain's BP and British Gas, US-based ExxonMobil and French group Total.
Although the move was expected to have little impact on global energy supplies, financial markets reacted by pushing prices higher.
The details of the plan were not immediately clear. But Morales himself has repeatedly said that the nationalisation of resources would not involve the confiscation or expropriation of oil companies' assets.
The military document stated that the measure was part of an "intelligent nationalisation, which implies ... the negotiation of terms of equity and justice" with oil companies.
Bolivia's move comes after Venezuela's Chavez clamped down on foreign oil companies that owe back taxes.
Mr Chavez's government also seized control of oil fields operated by Total and ENI of Italy after they rejected new operating accords requiring higher royalties to be paid to state-owned Petroleos de Venezuela SA.