"We're hitting the ground running and we're not using today just as a photo op," he told reporters as he took his seat at the table on the top floor of the Beehive.
"We're going to head into some quite serious discussions."
All 20 cabinet ministers are National Party MPs. There are three others who hold portfolios outside cabinet and five ministers from the support parties which have signed agreements with National.
Mr Key earlier gave a preview of the message he was taking into his first cabinet meeting.
"Firstly it will be that we shouldn't underestimate the enormity of the challenge, that these are very difficult economic conditions," he said.
"And in reality, 24 hours from now I will be leaving for Lima where I think the message on the international stage will be that there's still great concern about the financial crisis."
Mr Key said today marked the beginning of his "first 100 days" plan of action that was released during the election campaign.
Parliament will sit on December 8 for two weeks, and legislation to cut taxes, streamline the Resource Management Act and deal with law and order issues will be introduced.
Before that Mr Key will have received the Treasury's latest fiscal update, which he has said will be slightly worse than the figures released last week.
Cabinet ministers who spoke to the media said they were exhilarated to be there, holding warrants signed by Governor-General Anand Satyanand.
But there was also a realisation that the new government has taken office at a difficult time and they were going to have to work hard to get the country through a recession.
For most of them it was the first time they had stepped into the cabinet room, with its round table dominated by the prime minister's high-backed chair.
It was Mr Key's second time. "I had a sneak preview yesterday," he admitted.
