The 69-year-old dentist was administered the oath of office as Pakistan's 13th President by Chief Justice Saqib Nisar at a simple ceremony held at the Aiwan-e-Sadr (the President House) here.
His predecessor President Mamnoon Hussain left the President House at completion of his five-year term on Saturday.
The oath-taking ceremony was attended by top civil-military brass including Prime Minister Khan and Army Chief Gen Qamar Javed Bajwa and foreign diplomats.
Dr Alvi had defeated Pakistan Peoples Party candidate Aitzaz Ahsan and the Pakistan Muslim League-N nominee Maulana Fazl ur Rehman in a three-way presidential contest.
Alvi was active in the student movement during Field Marshal Ayub Khan's era in 1969. He was shot during a protest in Lahore and proudly carries a bullet in his right arm.
In 1979, he was a Jamaat-e-Islami (JI) candidate for the provincial assembly but elections did not take place.
Alvi is one of the founding members of PTI. He served as PTI secretary general from 2006 to 2013.
He won the National Assembly elections from NA-247 (Karachi) during the July 25 polls. He was also elected member of the National Assembly in the 2013 general election.
In Pakistan, the President is considered as a symbol of the federation and head of the state and exercises all powers on the recommendations of the prime minister.
With his close ally Alvi as President, Khan can smoothly implement his agenda, according to observers.