Mr Mahama, 53, was sworn in several hours after the president died at a hospital in the capital, Accra.
Opposition parties praised the swift transition to Mr Mahama, saying it showed Ghana was a mature democracy.
Mr Mahama has convened his first cabinet meeting, and visited the Atta Mills home to pay his condolences.
Atta Mills, who suffered from throat cancer, had governed since 2009 and had planned to run for a second term in elections in December.
The BBC's Sammy Darko, in Accra, says Mr Mahama will now serve as president until the election, but it is unclear whether he will be the candidate of the governing National Democratic Congress (NDC) party.
Taking the oath at an emergency parliamentary session, Mr Mahama said he would govern for all Ghanaians.
"I wish Ghanaians to be assured that all is well," Mr Mahama said.
"We are going to maintain the peace, unity and stability that Ghana is noted for."
He's declared a week of national mourning.
While Mr Atta Mills's illness had always been a subject of great debate, it was never officially confirmed, correspondents say. He had always insisted he was well, and planned to seek re-election in December's poll.
According to a presidential aide, the leader had complained of pains on Monday evening and his condition had deteriorated.
He had recently returned to Ghana after visiting the US for medical checks.
Former Ghanaian military ruler Jerry Rawlings when asked about Attah Mills' health said:
"He couldn't sustain himself for three hours per day."
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