Arriving from his audience at Buckingham Palace where he formally "kissed hands" with the Queen, the Conservative leader said he intended to form a "full and proper" coalition with the Liberal Democrats.
With his wife Samantha by his side, he declared: "This is going to be tough and difficult work. Coalition will throw up all sorts of difficulties but I believe that together we can provide that strong and stable government that our country needs."
His arrival was marked by a telephone call from President Barack Obama in the White House congratulating him on his appointment.
Less than two hours earlier, Gordon Brown had emerged to announce that he was making his own journey to the Palace to tender his resignation, bringing down the curtain on 13 years of Labour government.
Liberal Democrat leader Nick Clegg will be the Deputy Prime Minister, sitting as one of five Lib Dem ministers in the new Cabinet.
The announcement came shortly before a deal to form a coalition government with the Conservatives was approved by Liberal Democrat MPs, peers and the party's ruling federal executive.
Mr Cameron's close ally George Osborne will be the new Chancellor of the Exchequer while William Hague is Foreign Secretary. It was reported that Andrew Lansley would go to the Department of Health, keeping his shadow cabinet portfolio.
Mr Cameron said he and the Lib Dem leader were both prepared to put aside their party differences and "work hard for the common good and for the national interest". "I believe that is the best way to get the strong Government that we need, the decisive Government that we need today," he said.
"I think the service our country needs right now is to face up to our really big challenges, to confront our problems, to take difficult decisions, to lead people through these difficult decisions so that together we can reach better times ahead."
The funny thing about the British Parliament is that they are one of the few last nations in the world to have no national/federal constitution. Most of the laws and statutes come from established practices or precedences from their long and illustrious history.
Also another funny thing - when they vote for a bill, they have up to 8 minutes (?) go to an 'Aye' or 'Nay' room, physically and do a count there. Cue MPs scrambling over their seats and rushing to the room of their respective decisions.
By the way, the old name for Prime Minister and Finance Minister sounds cool:
Chancellor of the Treasury
Chancellor of the Exchequer
Oh, you don't say ol' chap!
Almost as cool as the coolest job title in the world :
Supreme Commander Allied Forces NATO Europe