Bothe the countries hoists their national flag at their embassy in Havana and Washington respectively.
Diplomatic ties between US and Cuba were severed in 1961 in the heat of the Cold War.
The re-establishing of embassies was a final step in the full diplomatic thaw President Barack Obama initiated in December.
US Secretary of State John Kerry and his Cuban counterpart held a meet on Monday to discuss bilateral issues here.
US President Barack Obama announced his decision to remove Cuba from the list of state sponsors of terror in May following a historic meeting with Cuban President Raul Castro during Summit of the Americas held in Panama in April.