The US has reopened its embassy in Cuba more than 54 years after it was closed, in a symbolic step signalling the warming of ties between both countries.
John Kerry, the first US Secretary of State to visit Cuba in 70 years, presided over the ceremony in Havana.
The US flag was presented by the same US marines who brought it down in 1961.
Cuba reopened its embassy in Washington last month but the former Cuban leader Fidel Castro has blasted the US for not lifting its trade embargo.
In an open letter on Thursday, Mr Castro said the US owed Cuba millions of dollars because of its 53-year-long embargo. The letter makes no mention of the reopening of the US embassy.
Mr Kerry described the hoisting of the flag as a “historic moment” speaking during the ceremony on Friday.
But he also warned that the US would not stop pressing for political change in Cuba.
“The people of Cuba would be best served by a genuine democracy, where people are free to choose their leaders,” he told a crowd of hundreds gathered outside the embassy building.
At the scene
Diplomacy is the cold and rational pursuit of national interest. But twice I saw John Kerry wipe his eye at the end of his speech at the American embassy.
The handing over of the flag by three old men who 54 years ago as young marines took it down; the US army band striking up the national anthem; the Stars and Stripes hoisted once more – this could never be seen as just cold diplomacy at work. There was emotion.
On both sides. US Cuban relations are entering a new era, and though there will be difficulties ahead and fresh misunderstandings, for those who had brought this restoration of diplomatic relations about, today was one to savour in the Caribbean heat.
In the past, he conceded, US policies have not led to democracy. “Cuba’s future is for Cubans to shape,” he added.
Three retired marines who lowered the American flag for the last time on 4 January 1961 handed it over to marines to raise it once again in Havana as the American national anthem played.
“I’m gonna love seeing that flag go back up,” said former marine Jim Tracy, 78, in a US State Department video released ahead of the ceremony.