Sheikh Sabah succeeded Sheikh Saad, who ruled for just nine days after Sheikh Jaber died on 15 January 2006 having spent more than 25 years on the throne.
Parliament voted Sheikh Saad out of office because of his ill health.
Sheikh Sabah had been running Kuwait's day-to-day affairs for years. He became prime minister in 2003 when concern grew about the health of his predecessor in the post, Sheikh Saad.
Observers expect him to maintain Kuwait's pro-Western stance and to pursue reforms; his government appointed Kuwait's first woman minister and he introduced laws which opened the door to foreign investors.
The new emir moved quickly to name a crown prince - his brother Sheikh Nawaf al-Ahmed al-Sabah - and a prime minister, his nephew Sheikh Nasser Muhammad al-Ahmed al-Sabah. The jobs, traditionally held by one individual, were separated in 2003.
The appointment of the crown prince also broke with the tradition of alternating power between rival branches of the Sabah dynasty.
Born in 1929, Sheikh Sabah was Kuwait's foreign minister for 40 years. Although he had a heart pacemaker fitted in 1999, he is said to be in good health.
His predecessor, the late Sheikh Jaber, had suffered several years of ill health following a minor stroke in 2001. He had been emir since 1977, having been prime minister from 1965-78 and heir-apparent from 1966. He survived an assassination attempt in 1985 and Iraq's invasion of Kuwait in 1990.
Members of the ruling family hold most of the key cabinet posts.