Pope Francis warned in his first mass on Thursday that the troubled Catholic Church risked becoming little more than a charity with no spiritual foundations if it failed to undergo renewal.
Addressing the cardinals who elected him as Latin America's first pope, the 76-year-old Argentinian said the Church could "end up a compassionate NGO", using an Italian word that can also mean "pitiful".
"I would like all of us after these days of grace to have the courage to walk in the presence of the Lord," Francis said, amid the splendour of the Sistine Chapel.
He warned the cardinals against "the worldliness of the Devil".
"Walking, building and confessing are not so easy. Sometimes there are tremors," the pope said, in a homily that will be scrutinised for clues to the style of his leadership.
The new head of the world's 1.2 billion Catholics, who was formerly known as Cardinal Jorge Mario Bergoglio, had begun his reign by meeting people in Rome and laying a bouquet of flowers in homage to the Virgin Mary in a basilica.
The pope also prayed at the altar of St Ignatius of Loyola, the founder of the Jesuit order to which he belongs.
He returned to the priests' quarters where he stayed before the conclave and settled his own bill.
The election of the son of a railway worker, who was considered a rank outsider, was met with widespread surprise and expressions of hope for change in a Church riven by scandal and internal conflict.
It was also seen as recognition of the Church's power in Latin America, which now accounts for 40 percent of the world's Catholics, in contrast to its decline in Europe.
"The choice of Bergoglio shows that the Church is determined not to remain in mourning for the crisis in Europe but has opened its doors to the revitalising energy of Catholicism's biggest continent," Vatican expert Luigi Accatoli told AFP.
Projecting an image as a simple man of the people, the pope chose to name himself after St Francis of Assisi, the 13th-century saint who shunned the riches of his family to devote himself to God and the poor.
The Vatican revealed that, for the ride back to the conclave lodgings after Wednesday's election, Francis shunned the papal limousine with the "Vatican City State One" number plates, opting instead to board a minibus with the cardinals.
It was in keeping with his image as a man who as archbishop of Buenos Aires chose to live in a modest apartment rather than the official residence and took buses to work.
-- Poisonous rivalries --
Experts said they expected the new pope to shake up the Vatican, where poisonous rivalries within the Curia -- its governing body -- plagued the papacy of Francis's predecessor Benedict XVI.
The cardinals who elected him understood "the need for a huge overhaul to save the Church from the swamps it has slipped into and which the 'Vatileaks' scandal made crystal clear," said Vatican expert Marco Politi, referring to the leaking of secret papal documents.
The Vatican confirmed that Francis had part of a lung removed some years ago, but its spokesman Federico Lombardi insisted: "This is not a handicap in his life.
"Those who know him have always seen him in good health."
Benedict, 85, abruptly ended his eight-year papacy last month saying he lacked the strength to deal with the rigours of the job.
Francis and Benedict are to meet within days.
A litany of firsts heightens the sense of renewal with the choice of a first pope from the Americas.
Francis is also the first non-European pontiff in nearly 1,300 years and the first from the prestigious Society of Jesus order, or the Jesuits, known for their work in education and promotion of social justice.
World leaders greeted his election, while the Organisation for the Islamic Conference said Muslim countries hoped "the relationship between Islam and Christianity will regain its cordiality and sincere friendship" under the new pope.
The pointed message reflected a rocky relationship between the two faiths that reached a low in 2006, when Benedict sparked fury across the Muslim world with remarks seen as linking Islam with violence.
Bergoglio is not without controversy.
He was only 36 when he was named to lead Argentina's Jesuits, a job he held for six uncomfortable years under the country's 1976-83 military dictatorship.
The future pope and other Catholic clergy were lambasted by leftist critics for failing to act against the "Dirty War" during which 30,000 people died or disappeared.
More recently, his opposition to gay marriage and contraception has brought him into conflict with the Argentine government of President Cristina Kirchner.
The Argentinian of Italian descent, the 266th pope, faces the immediate challenges of stamping his authority on the Vatican machinery and trying to coax back a Catholic flock that is deserting churches across the West.
The hushed-up sexual abuse of children by paedophile priests going back decades cast a dark shadow over the conclave, which included several cardinals implicated in the scandals.
Francis's inauguration mass will take place on Tuesday -- a significant date in the Catholic calendar because it is the Feast of St Joseph.