Leo, the former cardinal Robert Prevost and the first US pope, looked serene as he said the mass in the frescoed chapel with the same cardinals who chose him to be the 267th pontiff and the successor to Pope Francis.
Leo, who was born in Chicago but spent two decades as a missionary in Peru, said a few words in English before continuing his homily in fluent Italian.
He painted the spiritual picture of the church he would like to see under his papacy.
"God has .... entrusted this treasure to me so that, with his help, I may be its faithful administrator for the sake of the entire mystical Body of the Church," he said.
"He has done so in order that she may be ever more fully a city set on a hill, an ark of salvation sailing through the waters of history and a beacon that illumines the dark nights of this world," he said on Friday.
The 1.4 billion-member church was great not because of "the magnificence of her structures or the grandeur of her buildings ... but rather through the holiness of her members".
Leo, 69, was elected at the end of a two-day conclave that ended on Thursday evening when white smoke billowed from the chimney on the chapel.
US cardinals had previously been written off as papal contenders because of a widespread assumption that the global church could not be run by a superpower pope.
However, he also holds Peruvian citizenship, meaning he has deep knowledge of both the West and less-developed nations.
After the mass, Leo will have lunch with the cardinals who elected him and they will then be free to return to their homes around the world.
The successor to Pope Francis, who died in April at age 88, inherits a number of major challenges, ranging from a budget shortfall to divisions over whether the church should be more welcoming towards the LGBTQI community and divorcees, and should let women play a greater role in its affairs.
US President Donald Trump was quick to congratulate Leo.
However, the new pope has a history of criticising Trump and Vice-President JD Vance's policies, according to posts on the X account of Robert Prevost.
The new pope worked for decades in the north of Peru, first as a missionary and later as bishop of Chiclayo from 2015 to 2023.
Catholics took to the streets of the small city in northwestern Peru, and church bells rang out to celebrate the election of a man who they embrace as one of their own.
One of the clues to what kind of a church leader Leo will be was in his choice of name, which pontiffs often use to send a signal about their priorities.
The last pope with this name was Leo XIII, who led the church from 1878 to 1903.
He was known for his devoted focus to social justice issues, and is often credited with laying the foundation for modern Catholic social teaching.
Prevost became a cardinal only in 2023. He has given few media interviews and is known to have a shy personality.
Francis brought him to Rome two years ago to head the Vatican office in charge of choosing which priests should serve as Catholic bishops, meaning he has had a hand in selecting many of the world's bishops.
