Shenzhou IX, carrying female astronaut Liu Yang and male astronauts Jing Haipeng and Liu Wang, blasted off from the Jiuquan Satellite Launch Center in Gansu province into a blue sky.
The crew will stay in space for more than 10 days, during which time they will perform scientific experiments and the country's first manual space docking - a highly technical procedure that brings two vessels together in high-speed orbit.
Successful completion of the space rendezvous and docking - which will see Shenzhou IX attach itself to the Tiangong-1 module currently orbiting Earth - will take China one step nearer to setting up its own space station in 2020.
At the Beijing Aerospace Control Center on Saturday, hundreds of scientists monitored and reported the spacecraft's status every few seconds.
Big screens showed the three astronauts smiling and waving at the monitoring camera when the carrier rocket blasted off.
At 6:47 pm, Shenzhou IX entered its orbit. Chang Wanquan, chief commander of the country's manned space program, announced that the lift-off had been a complete success.
Wu Bangguo, chairman of the National People's Congress Standing Committee, who was watching the launch at the Jiuquan Satellite Launch Center, congratulated the space scientists for the successful lift-off.
And State Councilor Liu Yandong read a congratulatory letter from President Hu Jintao, who is in Denmark for a state visit, saying that: "I feel very glad to hear of the success of launching the Shenzhou IX manned spacecraft and I would like to extend warm congratulations and sincere regards to all those participating in the research and tests (of the country's space program)."
The rendezvous and docking between the Shenzhou IX spaceship and the orbiting space lab module Tiangong-1 will mark a major breakthrough in the country's manned space program, Hu said in the letter.
Back in Zhengzhou, Henan province, up to a hundred media people swarmed into Liu Yang's home to see her parents and relatives watching the live broadcast of the launch.
In the residential community, a large LED screen was set up on Saturday afternoon, drawing hundreds of people to view the launch.
"Daughter, I love you," a relieved Niu Xiyun, Liu's mother, said right after the launch. "You are the flower in my heart."
"My wish is that she and all of the crew finish the mission successfully," said her father, Liu Shilin.
In about two days, the spacecraft will conduct a robotic docking with Tiangong-1 and astronauts will move to the space lab module and conduct scientific experiments.
For them, the challenges ahead are tough, including conducting the country's first manual docking and living in weightlessness for the longest time in China's space history.
According to the plan, the manual docking is scheduled for the middle of the mission. Astronauts will maneuver the spacecraft close to Tiangong-1 - both moving at a speed of 7.9 km per second - in a limited time and with minimal fuel consumed.