In an emotional 40-minute speech televised live from the Kremlin, Putin said "in people's hearts and minds, Crimea has always been an integral part of Russia."
He dismissed Western criticism of Sunday's Crimean referendum in which residents of the strategic Black Sea peninsula overwhelmingly backed breaking off from Ukraine and joining Russia as a manifestation of the West's double standards.
But the Russian leader insisted his nation has no intention to invade other regions of Ukraine, saying "we don't want a division of Ukraine, we don't need that."
The statement sounded as a clear warning to both the new Ukrainian government in Kiev and to the West to respect Russia's interests.
In response, Ukraine's new government called Putin a threat to the whole world and US Vice President Joe Biden warned that the US and Europe will impose further sanctions against Moscow.
"The world has seen through Russia's actions and has rejected the flawed logic," Biden said, meeting today with anxious European leaders in Poland.
Thousands of Russian troops have been massed along Ukraine's eastern border for the last few weeks Russia says that was for military training while the US and Europe view the troops as an intimidation tactic.
Putin argued that the months of protests in the Ukrainian capital of Kiev which prompted President Viktor Yanukovych to flee to Russia had been instigated by the West in order to weaken Russia.
With strong emotion, Putin accused the West of cheating Russia and ignoring its interests in the years that followed the 1991 Soviet collapse.
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