As the nearly three-hour service closed at Ebenezer Baptist Church, organizers suggested forgoing the traditional singing of "We Shall Overcome" because the inauguration would begin. But the crowd shouted protests, so the choir and congregation sang the civil rights anthem before settling in to watch the events in Washington.
In the nation's capital, dozens took pictures of the King statue before walking to the National Mall for the inauguration.
Nicole Hailey, 34, drove all night with her family from Monroe, N.C. She attended Obama's first inauguration four years ago and was carrying a commemorative Metro ticket from that day with Obama's face on it.
She and her family visited the King memorial before the swearing-in.
"It's Martin Luther King's special day," she said. "We're just celebrating freedom."
At the ceremonial inauguration, Obama took the oath on a Bible once owned by King. He called it "a great privilege." The King Bible was one of two used; the other had belonged to Abraham Lincoln.
In Columbia, S.C., civil rights leaders paused during their annual King Day rally to watch the inauguration on a big screen. Most of the crowd of several hundred stayed to watch Obama's address.
"You feel like anything is possible," Jelin Cunningham, 15, said of Obama's presidency.
"I've learned words alone can't hurt or stop you, because there have been so many hateful things said about him over the past four years," she said.
At the Atlanta service, King's youngest daughter, Bernice King, said the country had been through a difficult year, with divisive elections, military conflicts, and natural disasters.
"We pray that this day will be the beginning of a new day in America," she said. "It will be a day when people draw inspiration from the life and legacy of Martin Luther King Jr. It will be a day when people realize and recognize that if it were not for Dr. King and those who fought the fight fought in that movement, we would not be celebrating this presidency."
She stressed her father's commitment to nonviolence, saying that after the 1956 bombing of the family's home in Montgomery, Ala., her father stood on the porch and urged an angry, armed crowd to fight with Christian love - not guns.
"This apostle of nonviolence perhaps introduced one of the bravest experiences of gun control that we've ever heard of in the history of our nation," she said.
Around the country, parades, service projects, and memorials marked the holiday.