Watched by his wife Pauline, who sat in one of the viewing galleries wearing a black hat, the former deputy prime minister swore his allegiance to the Queen in a traditional ceremony of introduction.
One of three Labour peers to take their seats in the Lords today, he has taken the official title of Baron Prescott of Kingston-upon-Hull, although he will be known more simply as Lord Prescott.
Dressed in ermine robes, Lord Prescott was flanked by his sponsoring peers, Labour former MPs Lord Grocott and Lord Dixon, as the Letters Patent affirming his peerage were announced by the Reading Clerk.
He then swore the Oath of Allegiance and signed the code of conduct before receiving a cheer from peers as he shook hands with the Lord Speaker, Baroness Hayman, on his way out of the chamber.
Now that the official ceremony is over, the 72-year-old is free to sit, speak and vote in the Lords. However, it is not known when he will make his maiden speech.
Although Lord Prescott has enjoyed a long and colourful career in politics, he had previously indicated he would not accept a peerage.
But writing on the website Twitter today, he said the new role would enable him to "keep holding this Government to account in Parliament".
He was appointed to the Lords as part of a batch of 56 new peers announced on one day after the election.
Despite spending 40 years in the Commons, which only ended when he stood down at this year's election, his antics outside of office are for some more memorable than his political achievements.
The lowest moment came in April 2006 when his political career suffered an almost-fatal blow after the Daily Mirror revealed he had been conducting a two-year affair with his diary secretary Tracey Temple.
When he was told that the story had broken, a shattered Lord Prescott said that Pauline was devastated by the news.
Labour former MPs Quentin Davies, who defected from the Tories in 2007 and was subsequently a defence minister, and ex-Cabinet Office minister Angela Smith also took their seats today. They were sworn in as Lord Davies of Stamford and Baroness Smith of Basildon.
To cope with the influx of new peers the House is sitting 15 minutes early on Mondays, Tuesdays and Thursdays.