Foreign officials were also attending the event, including European diplomats, U.S. Special Envoy Zalmay Khalilzad, and American NATO commander General Scott Miller.
There was a moment of panic but a defiant Ghani urged calm, continued his speech, and was sworn in to a cheering crowd.
The event happened as political rival and former chief executive Abdullah Abdullah also held his own inauguration ceremony at a separate location.
The two men both say they won the disputed presidential election.
The United States has been trying to broker an agreement between the two camps.
The standoff threatens political chaos just days after the U.S. and Taliban signed their agreement for foreign troops to withdraw from the country.
