The Jawaharlal Nehru University scholar ascends to the post at a crucial time in Nepal and in his capacity will assume the responsibility of steering the politically-divided country forward on the peace process.
Dressed in a blue suit, white shirt and traditional ''topi'', the 57-year-old Bhattarai took the oath of office at the President Ram Baran Yadav's office this afternoon.
Along with Bhattarai, the newly-appointed Deputy Prime Minister and Home Minister Bijay Kumar Gachhadar of the Madhesi coalition was also sworn in.
Bhattarai's election came after days of political wrangling among the major players in Nepal. His name was finally sealed after the Madhesi Janaadhikar Forum-Democratic, the coalition of Terai-based Madhesi parties, extended its support to his candidature.
The Cabinet will be expanded later after further consultations with the coalition partners, officials said. Bhattarai, the number two in the Maoist ranks after Prachanda, will have to do some fine balancing to keep the Madhesi front -- the fourth largest group in the CA -- happy.
Sources have said that Madhesi parties have demanded a dozen ministerial berths during negotiations with the Maoists.
President Yadav had earlier directed the Parliament to choose a new prime minister after Jhal Nath Khanal, who was elected premier after 17 rounds of polls in Parliament, resigned on August 14 for failing to make "concrete" process in the peace process.