The Republican, who still faces skepticism and anger from some former Senate colleagues of his own party, was sworn in after a deeply divided chamber voted on Tuesday to confirm him.
The twice-wounded Vietnam combat veteran now faces $46 billion in automatic, across-the-board budget cuts that will hit the Pentagon on Friday unless a deal can be made by the Obama administration and Congress to avoid them. But no talks on an agreement appeared to be under way.
Among Hagel's other challenges are deciding on troop levels in Afghanistan as the United Statse military emerges from two wars and fighting worldwide terrorism with smaller, deficit-driven budgets.
He also will have to work with lawmakers who spent weeks attacking him in one of the bitterest fights over a Cabinet choice in more than two decades. Fellow Republicans were angry that he had strayed from the party line on several issues.
The top Republican on the Armed Services Committee, Sen. Jim Inhofe, said Hagel's record on Israel, Iran, defense spending and nuclear weapons "demonstrate, in my view, a profound and troubling lack of judgment on many of the critical issues he will now be confronted with as secretary of defense."
But promised to work with Hagel to avoid the deep budget cuts that loom.
Hagel, in turn, promised to work closely with Congress.
"I am honored that President Obama and the Senate have entrusted me to serve our nation once again," Hagel said in a statement.
Hagel was expected to address civilian and uniformed employees at the department later in the day Wednesday.
Hagel joins President Barack Obama's new, second-term national security team, including Secretary of State John Kerry and CIA Director-designate John Brennan.
Obama alluded to the need for cooperation in his statement welcoming the vote.
The president said he was grateful to Hagel "for reminding us that when it comes to our national defense, we are not Democrats or Republicans, we are Americans, and our greatest responsibility is the security of the American people."
In the course of the nomination fight, Republicans insinuated that Hagel has a cozy relationship with Iran and received payments for speeches from extreme or radical groups. Those comments drew rebukes from Democrats and some Republicans.