The transfer saw 10,000 US troops who had been operating in the east under the coalition fall under the 37-nation International Security Assistance Force (ISAF), boosting it to about 31,000 soldiers nationwide.
The event was marked by a flag-changing ceremony in the capital Kabul attended by Afghan President Hamid Karzai and the top commanders of both forces.
The transfer of authority will enhance the work of the foreign forces by bringing them under one command, ISAF commander General David Richards said at the ceremony.
"Throughout Afghanistan we will continue to confront insurgents when and where necessary," said the British commander, who was promoted to four-star general hours before the changeover. "But the overarching purpose of our security operations is to enable improvements in government capacity and to accelerate reconstruction and development, for real benefit to the lives of all Afghans."
About 8,000 troops will remain under the command of the US-led coalition and focus on counter-terror activities - principally hunting Al Qaeda chief Osama Bin Laden - as well as training and aircraft support duties.
The coalition invaded Afghanistan almost exactly five years ago, October 7, 2001, and within weeks toppled the extremist Taliban government, which had sheltered Al Qaeda leaders blamed for the September 11 attacks in the United States.
But the Taliban insurgency has grown stronger since then, with insurgents killing scores of foreign and Afghan troops in mass attacks and also intensifying a vicious campaign of suicide and roadside bombings.
ISAF took over command of the Taliban-dominated southern provinces from the coalition July 31, saying that it would put renewed emphasis on reconstruction and development, which it says are key to undermining support for the Taliban.
The move took the force into one of the most hostile areas of the country, where it has faced a wave of violence that has claimed the lives of 32 NATO troops.
Member nations have since admitted to seeing their fiercest fighting in decades in the region.
The east, which borders Pakistan where military officials have said that many leaders of the insurgency are based, is also dangerous and contains several Taliban strongholds.
It is regarded as the cradle of the Al Qaeda terror network and a possible hiding place for Bin Laden.
Although NATO is now in command countrywide, US commitment to Afghanistan was undiminished, coalition commander Lieutenant General Karl Eikenberry told the ceremony of around 400 people.
"As a NATO member, the United States will remain by far the single largest contributor of troops and capability," he said. "We will also maintain our strong capability in support of counter-terrorism missions to strike Al Qaeda and its associated movements wherever and whenever they are found."
Eikenberry also paid tribute to the 337 members of the coalition and the more than 800 members of the Afghan security forces that he said had been killed during the past five years of the coalition's campaign.
Karzai praised the work of the coalition and NATO forces in providing security and fighting extremists, a task that he said needed a united front.
"We see that Afghanistan is still today the victim of terrorism, the victim of terrorists who come from outside our country," Karzai said. "We hope all countries - Islamic and non-Islamic - put their hands together and fight terrorism, which is the enemy of humanity."
NATO Secretary-General Jaap de Hoop Scheffer said that ISAF aimed to set the conditions for reconstruction. "In Afghanistan, there can be no development without security; and there will be no long-term security without development," he said in a statement.
NATO's senior civilian representative in Afghanistan, Daan Everts, said that the event was "opening a new chapter in the evolution of NATO and ISAF's mission in Afghanistan."
After the handover British Prime Minister Tony Blair said that the NATO-led mission is "absolutely critical" for world security.
Blair told reporters in London that everybody was better off now in Afghanistan despite the renewed fighting.
© 2006 Agence France-Presse
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