"People who have confidence in the future make big plans," Nutter said in his inaugural speech at the Academy of Music. "This is the new Philadelphia."
Nutter takes over the nation's sixth-largest city as it seeks to capitalize on a growing reputation for arts, culture and history while struggling to attract more jobs and calm the violence that riddles some neighborhoods.
In Nutter's first executive order, signed shortly after he took the oath of office, he declared a "crime emergency." Noting there were an average of five shootings a day in the city last year, the order gives newly sworn police Commissioner Charles Ramsey until Jan. 30 to develop a plan for combating the problem.
In his speech, Nutter told Philadelphia's more than 1.4 million residents that he has had enough of the violence that led to 392 murders last year - a higher homicide rate than that in New York, Chicago and Los Angeles.
Citing a massive reduction in New York homicides over the last decade, Nutter said Philadelphia should reduce its murder rate by 30 percent to 50 percent within three to five years.
"To the law-abiding citizens of Philadelphia, I say that we are the great majority. To the law breakers, you are in the small minority," he said to a standing ovation. "This is our city and we are taking it back: every day, every block, every neighborhood, everywhere in Philadelphia. I've had enough and I'm not playing around about it."
The new mayor also drew gasps from the crowd of hundreds as he cited two dismal education statistics: the city has a 45 percent dropout rate and only 18 percent of residents have bachelor's degrees.
Philadelphia can do better, he said, asking the business and education communities to work with residents to double the bachelor's degree rate in five to seven years.
"We are the education Mecca of the United States of America. Education is our business," he said, noting the area's dozens of colleges and universities.
Over the same period, Nutter said he wants to cut the dropout rate in half.
"The goal is an economic imperative. It is an educational imperative. It is a moral imperative," he said.
On crime, Nutter called for more police to patrol neighborhoods by foot or bicycle in order to build trust in the communities. In addition, he spoke of putting ex-offenders to work by giving tax credits to businesses that hire them.
The new mayor also wants to revamp the zoning code, reduce and simplify taxes to encourage development, and control health care and pension costs. He mentioned upcoming negotiations with municipal unions, saying that the contracts should be "fair and reasonable" to both employees and taxpayers.
"That's my vision for a new Philadelphia," Nutter said. "I'm asking all of you to embrace it and make it happen."
The 50-year-old Democrat, who became Philadelphia's 98th mayor and replaced the term-limited John Street, is a former city councilman. He defeated Republican challenger Al Taubenberger by a 4-1 margin in the November election.
Nutter ran as a reformer and sharply criticized a deeply entrenched pay-to-play culture at City Hall. On Monday, he pledged that "ethics will be a centerpiece of this government."
Following the inauguration, all but one of Nutter's cabinet members were sworn in at City Hall.
Camille Cates Barnett, the incoming managing director, did not attend because she was preparing for her husband's funeral, set for Tuesday. James Barnett died in a car accident last week as he traveled from the couple's home in Washington, D.C., to Philadelphia.
After the cabinet swearing-in, Nutter was slated to attend a luncheon for students and mentors, followed by inauguration festivities at the Philadelphia Navy Yard - now a mix of office and manufacturing space.
On Tuesday, he plans to hold an open house at City Hall, where members of the public can meet him in a receiving line.