Mr. Obama was officially sworn-in to begin his second term on Sunday, in keeping with the Constitution's mandate that presidents begin their new term on Jan. 20. But because inaugural ceremonies are historically not held on Sundays, the public celebration was pushed to Monday, coinciding with the birthday of late civil rights leader Martin Luther King Jr.
Vice President Joe Biden was also sworn in for the second term a second time Monday. Biden took the oath of office Sunday at the Naval Observatory in northwest Washington. Justice Sonia Sotomayor, appointed by Mr. Obama as the first Hispanic to serve on the Supreme Court, administered the oath to Biden
The mood surrounding the president's second inaugural was more subdued than four years ago, when the swearing in of the nation's first black president drew 1.8 million people to the Mall. Still, an estimated 800,000 people filled the National Mall to witness Mr. Obama's swearing-in and inaugural address. If the estimates are correct, that would make it the largest second-term inaugural in history.
The centerpiece of the day's activities was the president's inaugural address, in which Mr. Obama asserted "America's possibilities are limitless." He declared that a decade of war is ending and the nation's economy is recovering.
"My fellow Americans, we are made for this moment, and we will seize it, so long as we seize it together," Mr. Obama said moments after taking the oath of office with first lady Michelle Obama and daughters Malia and Sasha at his side on a crisp day in the nation's capital.
The president didn't dwell on any first-term accomplishments but looked to hard work ahead in a country still grappling with a sluggish economy.
"We must make the hard choices to reduce the cost of health care and the size of our deficit," he said. "But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future."
He did not expound on any specific policy proposals, saving them instead for his Feb. 12 State of the Union address.
Security was tight across Washington, with several streets near the White House and Capitol Hill closed off. Humvees and city buses were being used to block intersections. About 13,000 law enforcement officials worked to keep the president and the crowd safe. More than 2,000 police officers from around the country were sworn in Sunday as deputy U.S. marshals.
Even in the frigid East Coast conditions, crowds of people from all over the country streamed into the Mall even before sunrise.
The inauguration of an Africa-American president on Martin Luther King Jr. Day was a significant convergence of two days in American history. As a minority who defied the odds, President Obama has made an immeasurable impact. He embodies the dream Dr. King talked about as he stood in front of the very same National Mall in 1963.
"This reminds us as that as a country, we've come a long way," said Dr. Frank Gilliam, dean of the UCLA School of Public Affairs. "There are hundreds of thousands of school-aged children for whom Obama is their first president and the only president they've known...I think [it] will have a profound effect on these people as they grow older and I think that's where we may witness the change, ultimately.
Washington largely shelved its partisan fighting for the three days of inaugural celebrations. But pressing matters await the president as he starts his second term, including three looming fiscal deadlines. He'll also need help from a reluctant Congress if he hopes to fulfill his promise to sign comprehensive immigration reform and tighten gun laws in the wake of last month's school shooting in Newtown, Conn.
After his swearing-in, Mr. Obama attended the traditional luncheon with lawmakers before joining marching bands and floats in the inaugural parade, which made its way from Capitol Hill to the White House.
The president and first lady then slipped into formalwear for two glitzy inaugural balls. That's far fewer than the 10 they attended after the 2009 inauguration, though this year's events still expected to draw up to about 40,000 people.
There was still plenty of star power in the entertainment lineup. Jennifer Hudson sang as the Obamas danced to "Let's Stay Together." Stevie Wonder ran through crowd pleasers such as "My Cherie Amour" and "Signed, Sealed, Delivered." Alicia Keys, in a flowing red gown, planted herself before a piano and dished up reworked lyrics to "Girl on Fire," declaring, "Obama's on fire." Brad Paisley, too, revised his lyrics to fit the occasion, and began by thanking the troops "for keeping us safe."
The Obamas and Bidens took a spin on the floor with selected members of the military. Mr. Obama danced with Air Force Staff Sgt. Bria D. Nelson, and the first lady with Gunnery Sgt. Timothy D. Easterling of the Marines. Biden danced with Army Staff Sgt. Keesha Nicole Dentino, while Jill Biden's dance partner was Navy Petty Officer Patrick Figueroa.
The first lady's custom ruby-colored gown as well as her Kimberly McDonald diamond-embellished ring and Jimmy Choo shoes will be here and gone - donated to the National Archives after the balls.
Stay with ABC7 for special coverage of the inauguration. Eyewitness news anchor David Ono is in Washington. Look for his reports on Eyewitness News or get the latest by following him on Twitter and Facebook.
The Associated Press contributed to this report.