Italian Franciscan Father Francesco Patton, 52, replaces Father Pierbattista Pizzaballa in the post known as Custos of the Holy Land.
The Custos is responsible for caring and maintaining Christian presence in much of the Middle East, as well as coordinating and organising the thousands of Catholic pilgrims to Jerusalem every year.
He was sworn in today afternoon in a ceremony in Jerusalem's Old City - which includes the site where Christians believe Jesus was crucified, buried and resurrected.
Angelo Isan, who works with the Vatican's embassy in Tel Aviv, said it was a "very important day for each one of us."
Alexandra, an elderly Christian Palestinian who joined in the procession, said she was happy to share such a happy day in the context of troubles for Christians across the region.
She said members of her family in the Syrian city of Aleppo had been forced into exile during the country's war and she was concerned about the Islamic State group threatening Christians across the region.
Patton was born in Italy and speaks English, Spanish and his native Italian. He has held a number of senior church administrative positions, the Custody's website said.
The Custody is made up of 285 members of the Franciscan order from 39 countries.
Its territory covers Israel, the Palestinian territories, Lebanon, Syria, Jordan, Cyprus, the Greek island of Rhodes and the monastery of Mosky, in Cairo.
Pizzaballa, who served for 12 years, was the longest-serving Custos in modern times.
