About 75 people became the first riders of the 20-mile system that snakes through a sprawling desert metropolitan area that includes the cities of Tempe and Mesa.
Planners project building 30 additional miles of light-rail lines by 2025, but it has yet to be determined if the area's love of cars will trump trains.
"The novelty is going to wear off and you'll see whether it catches on or not," said Sam Mazzeo, 50, a mortgage broker who was at a downtown Phoenix light-rail station. "People use mass transit in other cities. You know, gas is not going to stay cheap forever."
Critics question whether enough people will be willing to switch from air-conditioned cars and trucks to the light-rail system where they will have to sweat out summertime waits at train stations. The average high temperature for Phoenix in July is 106 F .
Phoenix had been the largest U.S. city without a public rail transit system. The fifth-most populous U.S. city has about 1.6 million people, with more than 4 million in the Phoenix-Tempe-Mesa area.
Phoenix's old trolley system shut down 60 years ago.
The economic crisis should encourage ridership, said Phoenix Mayor Phil Gordon.
"Everybody realizes that the days of three- or four-car families are a thing of the past," Gordon told Reuters. "We can no longer afford to do that."
Gordon said commuting by train was cheaper than car travel, reduced traffic congestion and helped cut auto emissions, which are linked to global warming.
Rides will be free until Thursday, the first day of 2009, when they will cost $1.25. A day pass will cost $2.50. Metro officials expect 26,000 boardings a day in 2009.
Other Western U.S. cities that built train systems in the past two decades include Dallas, Denver, Houston and Salt Lake City, Utah.
Plans for the system were first envisioned in the 1980s, but voters rejected several ballot measures before finally approving a sales tax to help finance light rail. Federal funds paid roughly half the cost.
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