Malcolm Turnbull assured Australia that its government remained strong despite an internal party revolt that made him the nation's fourth leader in little more than two years.
The former communications minister was sworn in as Australia's 29th prime minister after a surprise ballot of his conservative Liberal Party colleagues voted 54-44 on Monday night to replace prime minister Tony Abbott only two years after he was elected.
Mr Turnbull's elevation has cemented a culture of disposable leaders as the new norm in Australian politics since the 11-year tenure of John Howard ended in 2007.
"There's been a change of prime minister, but we are a very, very strong government, a very strong country with a great potential and we will realise that potential working very hard together," he said as he left his Canberra home this morning.
"This is a turn of events I did not expect, I have to tell you, but it's one that I'm privileged to undertake and one that I'm certainly up to."
Shortly before Mr Turnbull was sworn in, a grim-faced Mr Abbott spoke for the first time since his sudden ousting, warning that the persistent volatility in Australia's government could hurt the nation's standing on the global stage.
"Australia has a role to play in the struggles of the wider world: the cauldron of the Middle East and security in the South China Sea and elsewhere," Mr said.
"I fear that none of this will be helped if the leadership instability that's plagued other countries continues to taint us."
He did not say during his speech whether he will quit politics, but he promised he would not destabilise the new prime minister.
Mr Turnbull, a 60-year-old former journalist, lawyer and merchant banker known for his moderate views, was party leader for two years before he was ousted in 2009 by Mr Abbott by a single vote in a similar leadership ballot.
Mr Abbott, a 57-year-old former Roman Catholic seminarian, has been described as the most socially conservative Australian prime minister in decades, while Mr Turnbull is considered not conservative enough by the right wing of the party.
Mr Abbott acknowledged his government had not been perfect, though he blamed the poll-heavy culture of modern politics for the frequent upheaval in the nation's leadership.
"We have been a government of men and women, not a government of gods walking upon the earth. Few of us, after all, entirely measure up to expectations," he said.
"The nature of politics has changed in the past decade. We have more polls and more commentary than ever before - mostly sour, bitter character assassination. Poll-driven panic has produced a revolving door prime ministership, which can't be good for our country. And a febrile media culture has developed that rewards treachery."
Mr Turnbull's return to the helm will probably lead to a major cabinet reshuffle, with treasurer Joe Hockey and defence minister Kevin Andrews among the ministers who publicly supported Mr Abbott.
Mr Andrews, a senior figure in the party's right wing, argued that he should retain his defence portfolio.
Mr Andrews challenged foreign minister Julie Bishop, a Turnbull supporter, for the Liberal Party's deputy leadership on Monday night, but was defeated by a vote of 70 to 30.
Unlike Mr Abbott, Mr Turnbull has supported Australia making polluters pay for their carbon gas emissions to reduce the nation's greenhouse gas emissions, and legalising gay marriage.
But Ms Bishop said the government's policies would not change without consultation with Liberal Party MPs.
"The policies remain until they're changed and they're only changed through a process of discussion and consultation with the party room," she said.
She said the party had moved against Mr Abbott because he had not made good on a promise made in February to improve the government's standing in opinion polls within six months.
"He asked for six months to turn things around. Well, seven months later a majority of the party room felt he hadn't done that," she said.
The political turbulence comes as Australia enters its record 25th year of continuous economic growth.
However a slowing of the mining boom that helped Australia avoid recession during the global financial crisis has slashed tax revenue and slowed growth while a hostile Senate has blocked key parts of the government's financial agenda.
The Liberals were elected in 2013 as a stable alternative to the then-Labour government. Labour came to power under Kevin Rudd at elections in 2007, only to dump him for his deputy Julia Gillard in 2010 months ahead of fresh elections.
The bitterly divided and chaotic government then dumped Ms Gillard for Mr Rudd just months before the 2013 election.
Successive opinion polls showed that the government was likely to lose at elections in September next year under Mr Abbott's leadership.
The polls show that Mr Turnbull is more popular than Mr Abbott, but many of those who prefer him vote for the centre-left Labour Party.