Willem-Alexander has been sworn in as king of the Netherlands following the abdication of Queen Beatrix.
He became the country's first king since 1890 when his 75-year-old mother signed the abdication deed earlier on Tuesday after 33 years on the throne.
The day's celebrations culminated in a water pageant, with the king sailing down Amsterdam's River IJ, greeting the thousands of people lining the banks.
Some 200 boats took part in the royal flotilla, many decorated in orange.
From a stage on the riverbank, the royal family were treated to a video montage of the country's sporting achievements since the king's birth 46 years ago.
The diverse evening of entertainment included rap and classical music performances, a high-bar display by a male gymnast, and a ballet duet.
Earlier in the day, the new king swore to uphold the constitution at a colourful enthronement ceremony in the Nieuwe Kerk, a decommissioned church, before a joint session of the Dutch parliament.
"I swear that I shall defend and preserve the independence and territory of the state with all my powers," he said.
"That I shall protect the general and individual freedom and rights of all my subjects and shall use all available means granted to me by law for preserving and promoting general and individual prosperity as I befitting of a good king.... So help me God almighty."
An estimated 25,000 people crowded into the square outside cheered as the announcement of his inauguration was made amid a trumpet fanfare.
'Happy and grateful'
The queen had announced her intention to stand down in January, saying her son was ready to reign and that it was time for the throne to be held by "a new generation".
She formally relinquished the throne at a short ceremony in the Royal Palace on Tuesday, signing a statement transferring the monarchy to her son "in accordance with the statutes and the constitution of the Kingdom of the Netherlands".
Huge cheers erupted in Dam Square, which is situated next to the palace, from those watching the ceremony on giant television screens, as she, her son and his wife Maxima - a 41-year-old Argentine-born investment banker - signed the deed of abdication.
Shortly afterwards, the three royals emerged on a balcony above the square.
The visibly emotional Princess Beatrix told the crowds: "I am happy and grateful to introduce to you your new king, Willem-Alexander."
He thanked his mother for "33 moving and interesting years", saying he and the public and people in Dutch overseas territories were "intensely grateful" to her.
The three then held hands as the national anthem was played, before the new king and the queen's three young daughters were brought out to wave at the crowds.
Their eldest daughter, nine-year-old Catharina-Amalia, has become Princess of Orange and is now first-in-line to the throne.
Many international royals and high-ranking dignitaries are taking part in the events, including the UK's Prince Charles and the Duchess of Cornwall, Prince Felipe and Princess Letizia of Spain and Denmark's Crown Prince Frederik and his wife.
Willem-Alexander has said he wants to "be a king that can bring society together, representative and encouraging in the 21st Century".
He has said he does not expect to be called "his majesty," saying people can address him "as they wish".
He is the seventh monarch from the House of Orange-Nassau, which has ruled the Netherlands since the early 19th Century.
Under Dutch law, the monarch has few powers and the role is considered ceremonial.
He or she is expected to be politically impartial, co-sign acts of parliament, help with the formation of new governments and to undertake state visits.
King Willem-Alexander has become not only the monarch of the Netherlands but also the Dutch Caribbean territories of Curacao, Aruba and Sint Maarten. He holds several military titles but requested an honourable discharge before his accession.
In recent decades it has become the tradition for the monarch to abdicate.
Queen Beatrix's mother Juliana resigned the throne in 1980 on her 71st birthday, and her grandmother Wilhelmina abdicated in 1948 at the age of 68.
Queen Beatrix remained active in recent years, but her reign has also seen traumatic events.
In 2009 a would-be attacker killed eight people when he drove his car into crowds watching the queen and other members of the royal family in a national holiday parade.
In February last year her second son, Prince Friso, was struck by an avalanche in Austria and remains in a coma.
Used for ceremony rather than being worn, the crown stands 23.5cm high and is 31cm in diameter at its widest point. It consists of eight arches topped with an orb and cross.
The crown was created in 1840 for King Willem II, by Bonebakker Jewellers of Amsterdam. It is fashioned from silver plated with gold.
There were originally 72 fake pearls on the arches of the crown, but 24 were removed in 1898 and the holes filled with small gold studs.
A red silk velvet lining covers the inside of the crown.
There are no precious stones in the crown, the gems are made from coloured glass backed by foil.
The crown is not worn - and monarchs of the Netherlands are inaugurated rather than crowned - but it is placed on a cushion on a table while the ceremony takes place.