He reluctantly agreed to be re-elected by Parliament earlier this month for another seven-year term because of the political instability.
Italy's economy is No. 3 among eurozone members, and financial markets have been anxiously watching to see if an effective government could be formed to carry on with outgoing Premier Mario Monti's efforts to keep the country from sliding into the eurozone's sovereign debt crisis.
Some Italian political observers have predicted such a hybrid government might last only a few months of Parliament's five-year term, before collapsing in squabbling.
But the fear of elections, especially after the lightning-quick rise of comic Grillo's grassroots movement, could prove to be strong glue.
Giovanni Orsina, deputy director of LUISS university's school of government in Rome, ventured that Letta's new coalition could "last more than we expect, 18 to 24 months, more or less."
The history professor cited "lack of alternatives, and because I believe Parliament's members are not particularly eager to get back to the polling booth and face new elections."
Voters, fed up with new and higher taxes, including a despised property tax revived by Monti, rejected his severe austerity policies.
The small centrist party created in time for the election by Monti, an economist and former European Union commissioner, will participate in the coalition, although Monti won't be in the Cabinet, which is heavy on two novelties — a large presence of female ministers and Italy's first black minister.
A native of Congo, Cecile Kyenge is a doctor who will serve as minister of integration. Proposals to make it easier for Italy' growing immigrant population to become citizens have gone nowhere in Parliament amid fierce opposition from the anti-immigrant Northern League party. The party, a Berlusconi ally, isn't in the new government.
Prominent among the women in the Cabinet is Emma Bonino, a former EU commissioner and Radical Party leader who will serve as foreign minister. Olympic gold medal kayaker Josefa Idem was tapped as minister of equal opportunity and sports.
Letta comes from a moderate wing of the left-rooted Democratic Party that is close to the Vatican. Since Parliament always includes an array of lawmakers enjoying good ties to the politically influential Catholic church in Italy, this was one more qualification on Letta's bridge-building resume.
The father of three sons, he lives in Rome's working-class Testaccio neighborhood. When he was tapped by Napolitano on Wednesday, he drove his own car to the Quirinal Palace, in what was seen as a photo opportunity gesture to Italian taxpayers who widely despise the huge fleet of luxury cars that shuttles around ministers and lawmakers.
In 1998, when he was 32, Letta became the youngest minister in Italy's history when he served as minister for European policy for then-Premier Massimo D'Alema, an ex-Communist leader. Letta seemed a natural for that post. He spent his childhood in Strasbourg, home to the European Parliament, and studied international law before jumping into politics.