Pierson will replace Mark Sullivan, who was in charge during the Colombia scandal - one of the worst in the agency's history. He retired as director in February.
The Secret Service has been criticized for having an insular, male-dominated culture, and Pierson's appointment also comes as Obama fends off criticism that his second-term picks for high-level posts have not included enough women and minority candidates.
Pierson, a native of Florida, is currently chief of staff at the Secret Service and began her career as a special agent with the Miami field office in 1983. The director's position does not require confirmation by the U.S. Senate.
"Julia is eminently qualified to lead the agency that not only safeguards Americans at major events and secures our financial system, but also protects our leaders and our first families, including my own," Obama said in a statement.
Starting in 1988, Pierson served four years with the Presidential Protective Division, and she became deputy assistant director of the Office of Protective Operations in 2005.
The Secret Service has been trying to rebuild its image after the April 2012 scandal when agency employees in Cartagena ahead of a visit by Obama took prostitutes to their hotel rooms.
It led to an official investigation that concluded that the president's safety had not been compromised, but the scandal was a big embarrassment for the agency.
Sullivan apologized to Congress last year for the episode, which he said reflected poor decisions by agents and was not representative of the agency's culture.
In a statement Tuesday, he said Pierson would excel in the role. "I have known and worked with Julie for close to 30 years," Sullivan said about his successor. "This is a historic and exciting time for the Secret Service and I know Julie will do an outstanding job."
Pierson also received accolades from a key Democrat in Congress. Her appointment "is welcome news and a proud milestone," Senate Homeland Security Committee Chairman Tom Carper said in a statement.
SPECULATION OVER FORMER OFFICIAL
Sources had told Reuters earlier this month that Obama had chosen retired Secret Service official David O'Connor to head the agency. Former law enforcement agents said they had heard he had withdrawn his name, but that was not officially confirmed and O'Connor did not respond to several attempts to reach him.
The National Organization of Black Law Enforcement Executives, or NOBLE, had written to the White House in opposition to O'Connor.
O'Connor's name had cropped up in a long-running racial discrimination lawsuit after one email that used racially charged language was sent to him, but his attorney said he did not distribute it further.
Ronald Kessler, who has written a book about the Secret Service, said black agents applied pressure that went all the way up to Obama to torpedo O'Connor's appointment.
Kessler predicted that Pierson's appointment will not change the Secret Service. "Only an outside director can shake up the agency," he said.