Spain's King Felipe VI administered the oath of office in a ceremony at the Zarzuela Palace near Madrid.
Mr Rajoy imposed direct rule on Catalonia in October, following a unilateral referendum on independence which the Spanish government considered illegal.
Spain's Socialist chief Pedro Sanchez was sworn in as prime minister on Saturday after ousting veteran conservative leader Mariano Rajoy, with Catalonia's separatist president promptly calling for talks over the region's independence drive.
Although he was re-elected as party head during primaries in May previous year, the Socialists were often sidelined as Podemos, the centre-right Ciudadanos and Mr Rajoy's PP took centre stage in politics.
As Spain's new leader, whose party only has a quarter of the seats in Parliament, Sanchez now has to decide who to include in his cabinet and is expected to name them next week, the report said.
The sting looked at Spanish businessmen who were bribing PP politicians in exchange for lucrative public contracts, with the party receiving a $300,000 fine as a result.
The Parliament voted 180-169 on Friday to replace Mr Rajoy's government with one led by Mr Sanchez.
In his first comments after winning the no-confidence motion, Mr Sanchez, a former basketball player, vowed to tackle "all the challenges which the country faces with humility".
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He said that the meeting could bring an end to the conflict between North and South Korea . "I didn't like it". Those who favor a diplomatic process with North Korea , as we do, might be encouraged by Mr.
All of his allies in the no-confidence motion stressed their vote against Rajoy was not a blank cheque for Sanchez.
Sanchez will only be able to implement policy initiatives "that allow him to obtain an easy majority" in parliament, said Fernando Vallespin, political scientist at the Autonomous University of Madrid.
Sanchez has already tied his hands by promising to respect Rajoy's 2018 budget, which includes generous concessions to the northern Basque region.
Sanchez plans to see out the remaining two years of the parliamentary term.
Mr Sanchez became prime minister with only 84 seats in the 350-member assembly thanks to support from the hard-left Podemos and smaller nationalist parties.
Spain is the eurozone's fourth largest economy and an influential member of the European Union.
BARCELONA, Spain New Spanish Prime Minister Pedro Sanchez had been barely sworn in Saturday before one of the country's most critical issues facing his fragile government was pressed upon him: ending the Catalan secession crisis.