Sisi, 59, was declared the country's president last week after winning 96.6 per cent of the presidential vote, almost a year since the ouster of Islamist leader Mohamed Morsi last year.
He took the oath of office for a four-year term at a ceremony held in front of the Supreme Constitutional Court's General Assembly.
Later he was given a 21-gun salute followed by the national anthem. He is the seventh president of Egypt. Sunday was declared a national holiday.
The low-key ceremony was attended by the entire Cabinet of Prime Minister Ibrahim Mahlab as well as Sisi's wife and children. Sisi, wearing a navy blue western suit, entered the hall walking side by side with the outgoing interim president Adly Mansour.
The ceremony, telecast live on TV, started with verses from the Quran. The inauguration will continue with ceremonies at the Ittihadiya and El-Kobbeh presidential palaces, which will be attended by several foreign representatives.
Egypt has tightened security across its capital Cairo for his inauguration amid assassination "threats" recently reported by Egyptian media, warning that former army could be a target of planned attacks.
Sisi, a retired field marshal who deposed Morsi, promised to restore stability and the economy after three years of turmoil.
Morsi, who became the country's first democratically- elected president after the ouster of longtime leader Hosni Mubarak, was deposed on July 3, 2013 following massive protests calling for his resignation.
Sisi, who was army chief at the time, stepped down from his military post this year to run for President.
In the election, Sisi defeated the only other contender Hamdeen Sabahi.
He inherits a nation that is divided and weary. Experts warn that if he cannot deliver in the next year or two he could face a mass revolt, like his predecessors.