Herman Ouseley, who has experienced at first-hand racial insults, harassment and violence, said: 'New generations of people from ethnic minorities, born and brought up here, are increasingly frustrated at the continued discrimination they face.
'The commission needs to raise its sights, look to more effective ways of working with as many people as possible and especially those in positions of power. We need to win hearts and minds to eradicate racial intolerance and prejudice, freeing our society from racial discrimination by the end of this century.'
Mr Ouseley, 48, became Britain's first black local authority chief executive three years ago when he was appointed to the top job at Lambeth council in south London.
He takes over at the CRE from Sir Michael Day, chairman since 1988, who led the commission in pressing for stronger race relations laws.
Mr Ouseley said: 'Legislation has made a significant impact on race relations in Britain already but discrimination still remains, dominating the lives of many from ethnic minorities. Without the good work of the commission, the situation in this country would be even worse.'
In a recent interview, Mr Ouseley, whose family emigrated to London from Guyana in 1957, said his experiences mirrored those of many black people living in the inner city.
'I have suffered having bricks and bottles thrown through our window and other forms of racial harassment. I have been beaten up on my way home from school by groups of white youths and called a black bastard.
'I have been picked up by the police for no reason. I have sued the police for wrongful imprisonment and won.'
But he has also emphasised the need for a sense of balance. 'At the other end of the spectrum, I have had the experience of being a black person in a powerful position . . . I have had to be seen to be fairer than fair to white people while bending over backwards to help black people and avoid being accused of having sold out.'
His concerns as he takes over the chairmanship of the commission, which has an annual budget of pounds 15m and employs about 200 staff, include increasing racial violence and the high proportion of black people on the dole, in prison and among the homeless. He believes these problems can be tackled through specific, targeted action.