"I represent the sounds of silence, the voices of innocence," Mr Satyarthi, 60, said in his acceptance speech after receiving the prestigious award to a standing ovation.
Mr Satyarthi shares the medal and the $1.1 million prize with 17-year-old Malala, who was shot by the Taliban in Pakistan's Swat two years ago for defying a ban on education for girls.
"Thank you to my father for not clipping my wings and letting me fly. Thank you to my mother for inspiring me to be patient and to always speak the truth, which we strongly believe is the true message of Islam," said Malala, the youngest Nobel peace prize laureate.
Renowned artistes from India and Pakistan - Sarod Maestro Amjad Ali Khan and singer Rahat Fateh Ali Khan - performed in the ceremony replete with symbolism.
Thorbjorn Jagland, Chairman of Nobel Committee, said, "A young girl and somewhat older man, one from Pakistan, one from India, one Hindu, one Muslim - both symbols of what the world needs, namely unity."
He said the Nobel committee shared the hope of the two laureates that the prize can contribute in bringing India and Pakistan together.
Mr Satyarthi and Malala were named for the honour by the Nobel committee in October for their work on promoting child rights in the troubled sub-continent, where millions are deprived of their childhood and education.
Mr Satyarthi's NGO Bachpan Bachao Andolan (Save Childhood Movement) prides itself on liberating over 80,000 children from bonded labour in factories and workshops across India.
According to the International Labour Organisation (ILO) there are about 168 million child labourers globally. There are roughly 60 million child labourers in India alone.