He celebrated his 75th birthday Sunday, which is the mandatory retirement age. Archbishop Jose Gomez will now lead the archdiocese, which includes about five million followers.
Before taking the reins, Gomez honored the work of his predecessor.
"Cardinal Mahony's legacy is a church that radiates the love of God and the truth of the gospel," said Archbishop Gomez.
"I'm sure we're going to miss Cardinal Mahony," said parishioner Harris Bustamante. "He's been with us a long time and we're glad and we welcome with open arms Archbishop Gomez too."
Jose Gomez is the first archbishop of Mexican descent to head a North American archdiocese.