The phones will compete with Apple Inc.'s iPhone and an expanding number of phones with Google Inc.'s Android system.
The first batch of handsets are made by Samsung Electronics Co. of Korea and HTC Corp. of Taiwan.
Microsoft's older smart phone software lost market share against more modern competitors. Now, the company is starting fresh with Windows Phone 7.
Microsoft gave the software a different look from Android and the iPhone. It uses "tiles" on a front screen that provide users with things like e-mail and Facebook updates at a glance.
More phones are expected soon, including one from Dell Inc.