"We want to erase the word 'social exclusion' from our vocabulary and our reality forever," the 49-year-old said in a speech shortly after taking office.
The new government would have "a market economy open to the world, with an emphasis on social integration," Humala said, already announcing plans to increase the minimum wage and place a windfall tax on wealthy mining companies.
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Humala became Peru's first leftist president in almost four decades in a ceremony in Congress attended by a dozen Latin American heads of state.
The successor to center-right leader Alan Garcia starts his five-year term with high expectations from the 30 percent of Peru's 28 million people who live in poverty despite a decade of growth backed by rich mineral deposits.
Humala successfully played down his ties to Venezuela's leftist anti-US president, Hugo Chavez, and played up links with Brazil's more moderate left in his second campaign for the presidency.
He says he is inspired by Brazil's ex-president Luiz Inacio Lula da Silva who was able to reduce poverty while fostering economic growth.
Humala won a second round run-off in June with a three point lead over Keiko Fujimori, daughter of Peru's disgraced former president Alberto Fujimori.
He brought together liberals and moderate leftists for his eclectic first cabinet, including leftist writer Rafael Roncagliolo as foreign minister and millionaire businessman Salomon Lerner as his cabinet chief.
Humala also named a singer, renowned Afro-Peruvian artist Susan Baca, to lead Peru's culture ministry.
Analysts say he managed to allay fears that he would follow the "20th century socialist" path of Venezuela's Chavez, such as nationalizing key industries.
Meanwhile, he has inherited dozens of social conflicts that will test the strength of his cabinet.
He immediately promised to increase the minimum wage on taking office, pledging a 25% rise by 2012, to 750 soles (275 dollars) a month from 600 (220 dollars) today, one of the lowest in Latin America.
He also said that mining groups that have enjoyed "extraordinary profits" would be required to make "a significant contribution," in the form of taxes, to national efforts to reduce poverty.
The amount would be negotiated, but the president said he had "no doubt" that the mining sector would contribute.
While his party is the largest minority in the Congress, Humala needs to build a coalition to get much legislative work done.
Humala led a failed military revolt in 2000 against Alberto Fujimori just before the latter fled into exile, for which he was jailed and then received a congressional pardon.
He has long been plagued by the antics of his family, including radical nationalist outbursts from his father, a failed 2005 uprising by one of his brothers, who is now in jail, and a recent visit to Russia by another brother who conducted a rogue gas deal talks without his consent.
