By JUAN FORERO

LA PAZ, Bolivia, Jan. 22 - Evo Morales, a Socialist protest leader and steadfast critic of American policies in the region, was sworn in Sunday as president of Bolivia, the first Indian to hold the position in this landlocked country whose indigenous majority had long felt oppressed and cut off from political power.

With tears welling in his eyes, his left fist raised and his right hand over his heart, Mr. Morales, 46, an Aymara Indian, took the oath of office as the leaders of 11 countries, American diplomats and the crown prince of Spain watched from the gallery of the country's ornate 19th-century Congress.

The son of a shepherd who grew up in an adobe home in the frigid highlands, Mr. Morales was dressed true to his anti-establishment roots, in a wool jacket featuring white pre-Hispanic motifs on the lapels and an open-neck shirt, but no tie.

Outside, tens of thousands of people celebrated, many of them Aymara and Quechua Indians, tin and silver miners, coca farmers and leftists from around the world. They blew cow horns, danced to brass bands and waved the seven-colored wipala flag of the Andean Indian nation. By evening, Mr. Morales and his vice president, Álvaro García, a former guerrilla leader who spent five years in jail for rebellion, had joined them.

"This is a historic day," said Gregorio Mamani, 43, like Mr. Morales an Aymara. "I am so happy that after so many years, we have an indigenous president, one we can be proud of before the whole world."

In the Congress, Mr. Morales asked for a moment of silence for Inca martyrs, for the Argentine guerrilla Che Guevara, who died in a failed effort to start a revolution here in 1967, and "the millions of humans who have fallen in all of Latin America." In a rambling, passionate speech that mixed Spanish and Aymara, Mr. Morales did not veer from the populist themes that enthralled his followers and gave him a landslide win in the election on Dec. 18.

He criticized "neoliberal reforms," the American-backed free-market prescriptions that are now being tested throughout the continent, for failing to pull Bolivians out of poverty. He lamented that there were no high-ranking Indians in the army, and he railed against the corruption of past governments.

Mr. Morales promised to "change our history" and give voice to the downtrodden.

"I want to say to you, my Indian brothers concentrated here in Bolivia, that the 500-year campaign of resistance has not been in vain," Mr. Morales said moments after being sworn in. "This democratic, cultural fight is part of the fight of our ancestors, it is the continuity of the fight of Tupac Katari, it is a continuity of the fight of Che Guevara."

But while Mr. Morales is clearly among the more anti-establishment in a crop of leftist leaders who have recently swept to power in Latin America, he has tempered his tone since his victory and has spoken of the need for Bolivia to trade and build ties with other countries. "I have learned that the president of a government has to do good business deals for his country," Mr. Morales said Sunday.

Unlike his predecessors, Mr. Morales enters the presidency with overwhelming good will from inside Bolivia and beyond. The economy is solid, having grown at 4 percent in 2005, the best measure in years. The International Monetary Fund in December wrote off the country's $231 million debt, while the deficit has shrunk significantly, thanks to higher tax revenues and spending constraints.

Political analysts say the sound economic picture, coupled with the mandate that propelled Mr. Morales to power, should give his government time to maneuver.

Still, he has to keep in mind supporters in the crowd like Gregorio Machicado Quispe, 48, who said, "We expect a complete change."

"The government needs to favor the poor, suffering classes," he said. "We have to control the wealth here in Bolivia."

Gustavo Torrico Landa, 46, a congressman from Mr. Morales's Movement Toward Socialism Party, said: "The government has to show that it has begun to function But it's not like Evo on the 22nd becomes president and this becomes Switzerland on the 24th."

Indeed, Bolivian officials close to Mr. Morales, including his top economic adviser, Carlos Villegas, said in interviews that the government was carefully considering what economic path to take.

That means determining everything from how to attend to poor farmers, a priority for Mr. Morales, to how much foreign aid to receive from the United States and other countries, which officials say cannot come with tough conditions.

Mr. Morales and other officials have also said trade is important, but have not decided what kind of agreements should be signed. In the meantime, Bolivia plans to ask Washington for an extension on a preferential trade deal that ends in December, Mr. Villegas said.

"The only path for Bolivia is to open itself to the world, but under better conditions than in the past," said Juan Ramón Quintana, another adviser to the president.

The policies that will be most closely watched, especially by multinational oil companies like Petrobras of Brazil and Repsol of Spain, will be in Bolivia's huge natural gas industry. Mr. Morales plans greater control, increasing taxes on the companies, but on Sunday he also said his government needed help from energy experts in formulating a policy.

Mr. Morales's history as leader of the country's coca farmers, and his campaign pledge to become a "nightmare" for the United States, has worried American officials concerned that his presidency could lead to instability and increased drug trafficking. On Sunday, he praised one of his closest allies, Fidel Castro of Cuba, and he warned that the United States could not use the fight against drugs "as an excuse" to "dominate and submit other peoples."

Yet, in his speech after the swearing in, he also welcomed Thomas Shannon, the assistant secretary of state for Western Hemisphere affairs, who was at the inauguration. Mr. Morales had a cordial meeting on Saturday night with Mr. Shannon and David Greenlee, the American ambassador, which will probably lead to more talks.

"We have international support," Mr. Morales said. "There is international solidarity."