Traoré pledged support for a transition leading to elections in July 2024, as he took the oath of office in the capital Ouagadougou under tight security.
Traoré, 34, led junior officers last month in the country's second coup in eight months.
As in the first coup in January, the motive was anger at failures to stem a seven-year jihadist insurgency that has claimed thousands of lives and driven nearly two million people from their homes.
'Existence in danger'
Junta members had already announced that Traoré would take over the role of transitional president, but Friday was the official investiture.
After taking the oath of office, Traoré, dressed in military fatigues and a scarf with the country's national colors, said: "We are confronted with a security and humanitarian crisis without precedent.
"Our aims are none other than the reconquest of territory occupied by these hordes of terrorists. Burkina's existence is in danger".
The swearing-in was outlined in a transition charter adopted last week.
It stipulates that the interim president's term will end when he is replaced by a president elected in elections, which are planned for July 2024.
"I swear on my honour before the Burkina people that I will preserve, respect, ensure respect for and defend the constitution, the transition charter, and (Burkina's) laws," Traoré said, reading his oath of office.
Last month Traoré toppled Lieutenant-Colonel Paul-Henri Sandaogo Damiba.
Damiba himself had seized power only in January, forcing out Burkina Faso's last elected president, Roch Marc Christian Kaboré.
Foreign dignitaries were absent from the inauguration.
Instead, the ceremony was attended by paramilitary forces, religious leaders, traditional authorities, officials, and Traoré's guests, reports RFI's correspondent in Ouagadougou, Yaya Boudani.