The oath was administered by Governor Daniel K. Tarullo in the Board Room, Xinhua quoted from a statement by the Fed.
US President Barack Obama announced his intention to nominate Yellen to be the Fed's Chair Oct 9, 2013. The Senate confirmed her on Jan 6, 2014. Prior to her appointment as Chair, Yellen served as Fed's Vice Chair.
Yellen's term as Chair ends Feb 3, 2018, and her term as a member of the Board ends Jan 31, 2024.
Yellen becomes the first woman to sit on the post in history
As a close ally of former Fed Chair Ben Bernanke, Yellen is expected to keep enforcing the low interest rates and cutting back the massive bond-buying programme that aims to restore growth. She is also widely watched to decide when to raise interest rates for the first time since the recession began.
Also on Monday, Bernanke began his new job at the Brookings Institution as a distinguished fellow in residence.
The former Princeton professor is expected to write a book reflecting on his economic policy, as he said Jan 16 at a meeting organized by Brookings.