His wife and children are already Catholic and there had been speculation he would convert after leaving office.
Cardinal Cormac Murphy-O’Connor, who led the service to welcome Mr Blair, said he was “very glad” to do so.
But ex-Tory minister Ann Widdecombe – herself a Catholic convert – said Mr Blair’s voting record as an MP had often “gone against church teaching”.
Last year, Mr Blair, who is now a Middle East peace envoy, said he had prayed to God when deciding whether or not to send UK troops into Iraq.
And one of Mr Blair’s final official trips while prime minister was a visit to the Vatican in June where he met Pope Benedict XVI.
Mr Blair was received into full communion with the Catholic Church during Mass at Archbishop’s House, Westminster, on Friday.
If you look at Tony Blair’s voting record in the House of Commons, he’s gone against church teaching on more than one occasion
Cardinal Murphy-O’Connor, who is the head of Catholics in England and Wales, said: “I am very glad to welcome Tony Blair into the Catholic Church.
“For a long time he has been a regular worshipper at Mass with his family and in recent months he has been following a programme of formation to prepare for his reception into full communion.
“My prayers are with him, his wife and family at this joyful moment in their journey of faith together.”
Chief Vatican spokesman Federico Lombardi said the Catholic church in Rome shared Cardinal Murphy-O’Connor’s “satisfaction”.
“The choice of joining the Catholic church made by such an authoritative personality can only arouse joy and respect,” Fr Lombardi added.
BBC correspondent David Willey said it had been no secret in Rome that Mr Blair had been taking instruction from a Catholic priest as a prelude to conversion.
He added that the Pope was informed of Mr Blair’s intentions prior to his visit to the Vatican in June 2007, shortly before he left office.
The Archbishop of Canterbury Dr Rowan Williams, leader of the Anglican church, wished the former prime minister well in his spiritual journey.
He said: “Tony Blair has my prayers and good wishes as he takes this step in his Christian pilgrimage.”
Downing Street confirmed the former prime minister had converted, but said it was a private matter and it would not comment further.
In the end, there is a judgement that, I think if you have faith about these things, you realise that judgement is made by other people… and if you believe in God, it’s made by God as well
But Miss Widdecombe, who became a Catholic in 1993, told the BBC Mr Blair’s move raised some questions.
“If you look at Tony Blair’s voting record in the House of Commons, he’s gone against Church teaching on more than one occasion. On things, for example, like abortion,” she said.
“My question would be, ‘has he changed his mind on that?'”
But Mr Blair’s biographer, Anthony Seldon, said the former prime minister’s faith had always been a major influence on his politics.
Mr Seldon said: “He’s a profoundly religious figure. Religion brought him into politics in the first place, not reading Labour Party history.
“Catholicism has been the religion of his wife – Cherie Blair has been incredibly important to him throughout his political life, encouraging him to go into politics and adopting many of his positions, so I think it was the obvious part of the Christian faith for him to come into.”
There has never been a Roman Catholic prime minister of Britain, although there is no constitutional barrier to such a move.
It’s something I suspect he probably felt he couldn’t do when he was prime minister and he’s done it now
Mr Blair’s ex-spokesman, Alastair Campbell
However, it had in the past been suggested that Mr Blair would wait until after leaving office, to avoid possible clashes such as over his role in appointing Church of England bishops.
Catherine Pepinster, editor of Catholic magazine The Tablet, said the news was not quite the same as if Mr Blair had changed Churches while still prime minister.
“I understand that one of the issues he was concerned with, because he was so closely involved in negotiations over peace in Northern Ireland, that perhaps some people there might have been uncomfortable with the prime minister converting to Catholicism at such a time.
“This situation is different. Although he remains a public figure now, and clearly has a role to play in the Middle East, it isn’t perhaps quite the same.”
Mr Blair’s ex-spokesman, Alastair Campbell, once famously told reporters “We don’t do God”. But reacting to news of Mr Blair’s conversion, Mr Campbell said: “I can’t say it surprises me at all. His faith does matter an awful lot to him.
“It’s something I suspect he probably felt he couldn’t do when he was prime minister and he’s done it now.”
Mr Blair last year told ITV1 chat show host Michael Parkinson he had prayed while deciding whether to send troops into Iraq.
“In the end, there is a judgement that, I think if you have faith about these things, you realise that judgement is made by other people… and if you believe in God, it’s made by God as well,” he said.
And earlier this year, he told the BBC that he had avoided talking about his religious views while in office for fear of being labelled “a nutter”.
The news of his conversion comes as a document showed Mr Blair had raised “concern” over ongoing business negotiations in a letter about an investigation into a Saudi arms deal.
Days later the probe was dropped, and Mr Blair said the decision to stop it was taken because of national security, and was not linked to commercial interests.