Castro blasted the outgoing administration for leaving her a heavily indebted country where poverty and a lack of opportunity have driven hundreds of thousands of Hondurans to migrate in recent years.
``My government will not continue the vortex that has condemned generations of young people to pay the debt taken on behind their backs,'' Castro said.
``We have the duty to restore the economic sector on the basis of transparency, efficiency, production, social justice, wealth distribution and national revenue,'' she said.
The 62-year-old Castro faces high expectations to turn around the deeply troubled country amid uncertainty about whether an unfolding legislative crisis will allow her the support she needs.
Relatively smooth elections and a healthy margin of victory Nov. 28 came as a relief, but political maneuvering in the run-up to Castro's inauguration has muddled the outlook and distracted from what was to be a hopeful new beginning after the two terms of President Juan Orlando Hernandez.
Honduras has been engulfed by a dispute over who will lead the newly elected Congress. Two congressional leadership teams have been selected _ neither legitimately according to experts _ and their standoff threatens legislative paralysis at a time that Castro desperately needs to quickly get to work addressing Honduras' problems.
Elected lawmakers from Castro's own Liberty and Refoundation Party backed one of their own to be the new legislative body's president Friday rather than support Castro's choice, which had been agreed with her vice president to win his party's support. Neither group backed down leading to surreal simultaneous legislative sessions Tuesday.
Luis Ruiz, a 52-year-old Castro supporter and fruit vendor near the Congress, said the political disagreement threatened to divide the country. ``She (Castro) has to resolve this situation through dialogue,'' Ruiz said. ``She hasn't taken power and she's already having problems, she must show her leadership.''
High unemployment, persistent violence, corruption as well as troubled health care and educational systems are just some of the pressing challenges awaiting Castro.
The United States government, seeing an opportunity to gain an ally in a region with few friends, has strongly backed Castro and stands ready to provide support. In a possible sign of tensions in the region, presidents from neighbors El Salvador, Guatemala and Nicaragua were not scheduled to attend.
Vice President Kamala Harris, who was given the task of addressing the root causes of Central American migration, arrived in Tegucigalpa Thursday leading the U.S. delegation.
Washington sees areas for cooperation on Castro's priorities of battling corruption and increasing economic opportunities in her country, two areas that could affect decisions by Hondurans on whether to stay or try to migrate to the United States.
``Honduras has been a very difficult partner for the United States, especially during the administration of Juan Orlando Hernandez for a number of reasons, including the consistent swirl of illegal activity around him and his family,'' said Jason Marczak, senior director of the Adrienne Arsht Latin America Center at the Atlantic Council.
``The anti-corruption agenda being front and center and her (Castro's) pledges is music to the ears of the Biden-Harris administration, given its focus on rooting out corruption not only in Central America but its global efforts on corruption,'' he said.
Castro has said she plans to formally invite the United Nations to set up an anti-corruption mission in Honduras.
Jose Manuel Suazo, 22, waited for Castro's appearance inside the stadium. He said he voted for Castro, and believes many other young people did too, because he wants her to attack corruption and end impunity.
Castro attended Mass with her family Thursday morning.
Harris was scheduled to meet privately with Castro shortly after her inauguration. Castro and Harris spoke by phone Dec. 10.
Castro won on her third bid for the presidency. She was previously first lady during the presidency of her husband, Manuel Zelaya, which was cut short by a military coup in 2009.
On Thursday, just hours before her inauguration, Castro announced her cabinet picks via Twitter. There were two women out of 16 announced positions. Her son Hector Zelaya, will be her private secretary and Manuel Zelaya's nephew, Jose Manuel Zelaya, is her choice for defense secretary.
Ramon Sabillon, a former National Police chief, who recently returned after years living in exile in the United States, was her pick for security minister.
Many voters this time said they were motivated above all by the possibility of removing Hernandez's National Party from power. Hernandez was first elected in 2013 and a friendly Supreme Court allowed him to overcome a constitutional ban on re-election and run again in 2017 in an election plagued by irregularities.
Federal prosecutors in New York have repeatedly spoken of Hernandez's purported ties to drug trafficking, alleging his political rise was funded in part by drug profits. Hernandez has not been formally charged and has repeatedly denied the accusations.
On Thursday, U.S. Rep. Norma Torres said in a statement she had asked Attorney General Merrick Garland to see that Hernandez was indicted and extradited to the U.S.
``President Hernandez has been a central figure in undermining the rule of law in his own country and in protecting and assisting drug traffickers to move their materials through Honduras and to the United States,'' Torres said. ``He has been repeatedly identified as a co-conspirator in other drug trafficking cases and has caused incredible pain to both the people of Honduras and the United States. I believe it is essential that the United States hold him accountable for his criminal behavior.''
On Thursday, 48-year-old Carlos Hernandez lugged a nearly life-size Castro pinata through the streets near the stadium where the inauguration will be held.
``This is now or never,'' Hernandez said. ``I do this out of conviction, we want our president to not fail us.''
He and his family came because he wanted Castro to feel she had the support of the people. ``I had never even voted, but I was sick and tired of the National (party).``