"In prayer, in awe and humility, on your behalf and at your command, I come to faithfully fulfil my role as 10th president of the state of Israel," he said, a skullcap on his head and his left hand resting on a copy of the Old Testament.
Known as much for his right-wing views as for his affable nature and quirky sense of humour, 74-year-old Rivlin takes over the presidency at a time of crisis for the Jewish state which is locked in a bloody showdown with Gaza militants.
Rivlin said Israel would not be bowed by the ongoing violence in Gaza.
"We are gathered here today not only because the law requires it, but also with a very clear message to our enemies: you have not overcome us and you will not do so," he said.
"The Hamas terrorists may dig their tunnels, shoot from within schools, use civilians as human shields, but this terrorism will not drive us back, will not weaken our spirit," he said just hours after an Israeli tank shell hit a UN school in Gaza, killing 15.
And in a direct address to Peres, he said: "Seven years ago, you stood on this platform and told us that you never dreamed of being president. You said your dream as a boy was to be a shepherd or a poet of the stars.
"Your dream, Mr President, came true. You were for us a shepherd of hope and a poet of vision."
Peres will on Friday leave his official residence in Jerusalem and move into a new apartment in Tel Aviv, close to the Peres Centre for Peace in Jaffa, Haaretz reported.
A lawyer by profession, Rivlin has won widespread support from across the political spectrum for his determined defence of democracy and civil rights.
But his political outlook is diametrically opposed to that of Peres, being a firm opponent of a Palestinian state and a keen backer of the settlements.
He will have a tough act to follow, with Peres's charisma and global standing enabling him to transcend the largely ceremonial position of the presidency and use it to promote a political message of peace.
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