Villepin, formerly the interior minister, replaces Jean-Pierre Raffarin, dumped after voters on Sunday roundly rejected Chirac's call for the ratification of a European Union constitution.
Chirac charged Villepin, 51, with the task of forming a new government.
Villepin arrived at the presidential Elysee Palace just minutes after Chirac bid farewell to Raffarin with a handshake on the palace steps.
Villepin was Chirac's foreign minister during the Iraq war. He is best known for his eloquent defense of the French stance against a US-led invasion.