Lew served as budget director for Obama and for former President Bill Clinton. A 57-year-old policy wonk, he will have to confront a host of tricky economic topics ranging from how best to scale back the government's role in the housing market to how to respond to China's economic heft.
But the high-profile Washington battle over how to rein in the growth of the nation's debt and put the budget on a sustainable path will dominate his tenure.
Lew helped spearhead acrimonious talks with congressional leaders in 2011 that preceded approval of an increase in the U.S. debt ceiling. He will have to reprise that role in the next two months, when another debt ceiling deadline looms.
Though he is mistrusted by a number of Republicans, Lew has some bipartisan credentials that might help him in budget talks.
The one-time Citigroup executive honed his political skills as a policy adviser to Democratic House Speaker Tip O'Neill, who is touted as a symbol of bipartisanship because he worked with Republican President Ronald Reagan to change the tax code and the Social Security retirement program in the 1980s.
"Jack is more concerned about what's fair than any personal attention or credit," said Pamela Jackson, who worked with Lew when O'Neill was speaker. "He was an integral and important part of those (tax policy and Social Security) negotiations as a trusted adviser to the speaker," she said.