Governor Anandiben Patel administered the oath of office to 72-year-old Nath, who led the Congress to victory in the recently-concluded state Assembly polls.
No other minister took oath along with him.
The Congress on Thursday had named Nath, the nine-time Lok Sabha member from Chhindwara, to head the state Congress Legislature Party, after hours of hectic parleys held by party chief Rahul Gandhi with senior party leaders.
On his arrival at the venue, Gandhi was greeted with loud cheers by the crowd. He was flanked by Nath and state Congress' campaign committee chairman Jyotiraditya Scindia.
National Conference chief Farooq Abdullah, Loktantrik Janata Dal leader Sharad Yadav, NCP chief Sharad Pawar, his party leader Praful Patel, former prime minister H D Deve Gowda, Karnataka Chief Minister H D Kumaraswamy, his Andhra Pradesh counterpart Chandrababu Naidu, Trinamool Congress' Dinesh Trivedi, DMK leader M K Stalin and RJD leader Tejashwi Yadav were among those present at the event.
BSP supremo Mayawati and SP chief Akhilesh Yadav, who have extended support to the Congress to form the government in the state, were not present.
Former prime minister Manmohan Singh, Congress leader in the Lok Sabha Mallikarjun Kharge, Rajasthan's new Chief Minister Ashok Gehlot, his deputy Sachin Pilot, former Haryana chief minister Bhupendra Singh Hudda and Puducherry Chief Minister V Narayanasamy were also present.
Former MP chief minister and senior Congress leader Digvijay Singh, Punjab minister Navjot Singh Sidhu and senior Congress leaders Anand Sharma, Raj Babbar and Rajiv Shukla were among those who attended the ceremony.
Three former BJP chief ministers - Shivraj Singh Chouhan, Kailash Joshi and Babulal Gaur - were also present on the stage.
Before the ceremony, an all-religion prayer meet was also organised.
Born at Kanpur in Uttar Pradesh to businessman father Mahendra Nath and mother Leela, Nath is an alumnus of the prestigious Doon School (at Dehradun in Uttarakhand).
He did his graduation from St Xavier's College, Kolkata, before taking a plunge into politics.
Nath was named the Congress chief in Madhya Pradesh in April ahead of the Assembly polls.
Many in the party recalled that former prime minister Indira Gandhi described him as her "third son", who helped her take on the Morarji Desai-led regime in 1979.
Thirty-nine years later, the senior-most member in the 16th Lok Sabha donned the battle gear to help Rahul Gandhi make huge gains for the opposition in MP where Shivraj Singh Chouhan is the longest-serving chief minister since 2003.
Along with Scindia, Nath was tasked with reviving the fortunes of the opposition Congress in Madhya Pradesh.
During the course of campaigning, the BJP attacked Nath after an audio-video clip went viral in which he was heard asking clerics to ensure 90 per cent voting in the state's Muslim-dominated areas to ensure a Congress victory.
Under Nath's leadership, the state Congress focused its campaign on "unfulfilled" promises of Chouhan, whom the party dubbed as "ghoshnaveer" (a man of hollow promises), a term that sparked street debates over the fate of schemes announced by Chouhan.
The Congress' tally in the outgoing House was only 58 while the BJP had 165 lawmakers.
This time, the Congress won 114 seats in the 230- member House. It has the support of total 121 MLAs, including SP (1), BSP (2) as also of four Independents.
The BJP has 109 members in the new Assembly.