Competing chants of "Obama" and "Yes we can" surged up from the convention floor as the outcome was announced.
Obama is the first African American to represent a major party for president.
After vice presidential candidate Sen. Joe Biden gave Wednesday's keynote speech, he was joined on stage by his wife, Jill, and Obama.
"I want everybody to know why I am so proud to have Joe Biden and Jill Biden and Beau Biden and Mama Biden and the whole Biden family with me on this journey to take America back," Obama said. "I think the convention has gone pretty well so far. What do you think?"
Even if it was a given, the nomination came through the roll call voting when the Illinois delegation got the microphone and Chicago Mayor Richard Daley helped to make history.
"From the far plains of the great city of Chicago, the candidate city for 2016 Olympics. And in 2008, World Series between the Chicago White Sox and the Chicago Cubs, hometown of the next president of the United States, Barack Obama. We yield to the great state of New York," Daley said.
"Let's declare together in one voice right here, right now, that Barack Obama is our candidate and he will be our president," Clinton said.
Pelosi declared that the ayes fromt eh crowd constituted a two-thirds majority and and declared Obama the nominee in a history-making moment where the first woman nominated to be a presidential candidate handed the vote off to the first female speaker of the House, who declared the first African-American nominee for president.
"It was very emotional. My colleagues, a lot of them in tears, got goose bumps really that this day finally came," said Illinois delegate Al Alvarez.
"I had to go home and tell my kids I saw history made," said Illinois delegate Audrey Nixon.
The Democrats are hoping that history is not merely ending with this nomination but continues on to the White House. Their focus has been policy, with speeches from veterans, like Illinois' Veterans' Affairs director Tammy Duckworth, and Joe Biden. All of them tried to put their stamp on Obama as a man who could lead the military in a challenging world. There was an introduction by Joe Biden's son Beau, who is the attorney general of Delaware and will soon be deployed to Iraq.
"He said he has seen Obama's strength as a leader even when he campaigned against him," Beau Biden said of his father.
"I watched how he inspired people. He tapped into the oldest belief in America. We don't have to accept the situation we cannot bear. We have the power to change it," Joe Biden said.
The vice-presidential nominee tried to distinguish between Obama and Republican Sen. McCain.
"Continue to spend $10 billion a month when the Iraqis have a surplus of a nearly $80 billion surplus? That's not change. That's more of the same," Joe Biden said, as the crowd joined in the "more of the same" refrain.
Earlier, with Michelle Obama in the audience along with Hillary Clinton, former president Bill Clinton laid down his thoughts on the nominee.
"It has convinced me that Barack Obama is the man for this job," he said.
Bill Clinton took on McCain first, saying that he respected McCain's service to America but then linked McCain's planned policies to the last two terms of the Bush administration.
"Let's send them a message that will echo across the Rockies and all across America, a simple message. Thanks but no thanks," Bill Clinton said.
"Barack Obama is right for the military. Barack Obama is right for our veterans," Duckworth echoed.Obama, the son of a black Kenyan father and a white American mother, is now one victory from becoming president of a nation where, just decades ago, many blacks were denied the vote. But even as he won the nomination, there was open talk in the convention city that Obama's race remained a stumbling block to winning the White House. "A lot of white workers ... and quite frankly a lot of union members believe he's the wrong race," AFL-CIO Secretary-Treasurer Richard Trumka told a breakfast meeting of Michigan delegates. Obama will face McCain, who will accept the Republican nomination next week in St. Paul, Minn. The polls show a close race ahead with McCain, a former Vietnam prisoner of war a few days shy of his 72nd birthday, and Obama was hoping Democrats would leave their convention united despite the hard feelings remaining from a bruising primary campaign that stretched over 18 months. "Everything I've learned in eight years as president and the work I've done since, in America and across the globe, has convinced me that Barack Obama is the man for this job," Bill Clinton said, to loud cheers. Michelle Obama, watching from her seat in the balcony, stood and applauded as the former president praised her man. And Obama, delighting the crowd with his appearance on stage, praised both Clintons as well as his wife for their prime time speeches this week. "If I'm not mistaken, Hillary Clinton rocked the house last night!" he shouted. The convention ends Thursday with Obama's acceptance speech, an event expected to draw a crowd of 75,000 at a nearby football stadium where an elaborate backdrop was under construction. Biden, who has twice sought the presidency in his own right, won his place on Obama's ticket by acclamation. In his acceptance speech, Biden said Obama was right about Iraq, a war he opposed from the start, and McCain was wrong. "These times require more than a good soldier. They require a wise leader," Biden said. "A leader who can deliver change. The change that everybody knows we need." Obama isn't the first black man to seek the White House, but is the first with a chance to win it. Others, including Jesse Jackson in 1984 and 1988, tailored their appeals largely to blacks or lower-income voters of all races. Obama's reach for political power and history was different, aimed at the broad American political middle. And his nomination, delivered so jubilantly, represents a gamble of sorts by the Democratic Party that a country founded by slave-owners and desegregated only in recent decades -- and even then sometimes violently -- is ready to place a black man in the Oval Office. Sen. John Kerry, the party's 2004 nominee, said Obama's victory shouldn't be a close call. In some of the strongest anti-McCain rhetoric of the convention week, he said his longtime friend is merely masquerading as a maverick. "The candidate who once promised a `contest of ideas' now has nothing left but personal attacks," he said. "How insulting ... how pathetic ... how desperate." Hillary Clinton's call for Obama to be approved by acclamation -- midway through the traditional roll call of the states -- was the culmination of a painstaking agreement worked out between the two camps to present a unified front after their long and often-bitter fight for the nomination. Inside the convention hall, the outcome of the roll call of the states was never in doubt, only its mechanics. "No matter where we stood at the beginning of this campaign, Democrats stand together today," declared Rep. Debbie Wasserman Schultz of Florida, a former Clinton supporter who delivered a nominating speech for Obama. "We believe passionately in Barack Obama's message of changing the direction of our country," she said. Earlier in the day, Clinton formally released her delegates amid shouts of "no," by disappointed supporters. "She doesn't have the right to release us," said Massachusetts delegate Nancy Saboori. "We're not little kids to be told what to do in a half-hour." And Clinton did get hundreds of votes in the roll call -- 341 to Obama's 1,549 -- before she called for him to be approved by acclamation. Polls show the campaign now is a close one between Obama and McCain, and both campaigns have been advertising in nearly a dozen battleground states for weeks. The same surveys show a strong desire for change after eight years of the Bush administration, and Obama has pledged an end to the war in Iraq and a fresh economic policy. Obama's nomination sealed a political ascent as astonishing as any other in recent memory -- made all the more so by his race, in a nation founded by slave owners. The son of a white mother from Kansas and a black father from Kenya whom he barely knew, he attended college and Harvard Law School. In between was a turn as a $12,000-a-year community worker on the streets of Chicago. He won his seat in the Illinois Legislature in 1996. But his first bid for higher office, a brash challenge to Rep. Bobby Rush in an inner-city Chicago congressional district, ended in failure in 2000. Four years later, as a candidate for the Senate, he dazzled with a keynote address at the 2004 Democratic National Convention, then won his election. He announced his presidential candidacy a scant two years after arriving in Washington. With his gifts as a speaker, his astounding ability to raise funds on the Internet and an unmatched ground operation pieced together by political veterans, he won the first test, the Iowa caucuses, on Jan. 3 Clinton rebounded to win the New Hampshire primary five days later, and the two were soon matched in a grueling battle for the nomination that was not settled until the primaries ended in June. "The journey will be difficult. The road will be long," he said then as he pivoted to confront McCain.
The Associated Press contributed to this report.