Although the US Constitution requires the oath of office to be taken by noon on 20 January, that falls on a Sunday so the public inauguration will take place on Monday.
Mr Obama took his official oath in the White House's Blue Room.
The public ceremony with pomp and circumstance will follow on Monday.
Supreme Court Chief Justice John Roberts administered the oath of office to Mr Obama, witnessed by First Lady Michelle Obama and their daughters Sasha and Malia as well as some family members and reporters.
Resting his hand on a bible used for many years by his wife's family, Mr Obama vowed "to preserve, protect and defend the Constitution of the United States".
He will repeat those words during Monday's public inauguration, in which he will set out his plans for the next four years.
Vice-President Joe Biden was sworn in for a second term at a small ceremony at his official residence earlier on Sunday morning.
The 70-year-old will also repeat his oath publicly on Monday.
Bunting and Beyonce
Thousands of workers and volunteers have been working to finish construction for Monday's celebrations, with white tents, trailers and generators being set up along the Washington Mall's parade route as nearby buildings were adorned with red, white and blue bunting,
For his part, Mr Obama rolled up his sleeves and donned gloves to spend Saturday sprucing up a school with other volunteers, as part of a National Day of Service kicking off the inauguration ceremonies - similar to the way he spent the day before his first presidential inauguration in 2009.
He urged volunteers to honour the memory of civil rights leader Martin Luther King, whose birthday, a national holiday, falls on Monday. This year is the 50th anniversary of King's march on Washington.
President Obama's second term work will be more of a challenge than Saturday's school work, says the BBC's Ben Wright in Washington - trying to change America's gun laws, reforming immigration and dealing with the country's debt.
In 2009, nearly two million people crammed into Washington to witness President Obama's first inauguration.
Four years on, the mood is unlikely to match that excitement, says our correspondent.
But, he adds, the second inauguration of America's first black president is a moment many will not want to miss.
Hundreds of thousands of people are expected in Washington for that event - a smaller number than the 1.8 million who flocked for the swearing-in in 2009.
They will crowd onto the Mall leading to Congress wrapped up against the cold, to see their president take the oath of office on the steps of the flag-draped Capitol and listen to his speech.
The day will include music from Beyonce and Fun, parades, black tie balls and very tight security.
Source: BBC
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