Mr Trump, in a prime-time address to a country that remains divided over his leadership, emphasized his desire to focus on problems at home by boosting the US economy with tax reform, a $1 trillion infrastructure effort and an overhaul of President Barack Obama's signature healthcare law, known as Obamacare.
After a first month in office dominated by a fight over his temporary travel ban on people from seven Muslim-majority nations, Mr Trump looked for a reset to move past a chaotic period that sowed doubts about his ability to govern effectively.
He called for national unity and showed a more measured tone, avoiding a repeat of his attacks on Democratic opponents and media organisations.
Democratic Senator Tom Carper said that "the person who wrote this speech must not have written the inaugural address. That one was "dark" and this one was more uplifting".
At his January 20 inauguration, Mr Trump painted a bleak picture of the country and described it as beset with "American carnage".
US stock futures advanced at the start of Mr Trump's address, but gave back some gains later in the speech.
Mr Trump focused part of the speech on foreign policy, stressing his support for NATO but insisting allies pay more for their defense.
In a possible nod to his bid to warm relations with Russia, Mr Trump said: "America is willing to find new friends, and to forge new partnerships, where shared interests align."
"We want harmony and stability, not war and conflict," said Mr Trump, who said, however, he would embark on a big defense buildup.
Mr Trump said a broad immigration reform plan was possible if both Republicans and Democrats in Congress were willing to compromise. He said US immigration should be based on a merit-based system, rather than relying on lower-skilled immigrants.
Comprehensive immigration reform eluded his two predecessors because of deep divisions within Congress and among Americans over the issue. Mr Trump said reform would raise wages and help struggling families enter the middle class.
"I believe that real and positive immigration reform is possible, as long as we focus on the following goals: to improve jobs and wages for Americans, to strengthen our nation's security, and to restore respect for our laws," said the Republican president, who took a hard line against illegal immigrants in his 2016 campaign.
Trump has used his early weeks in office to repeat vows to build a wall along the US-Mexico border and intensify deportations of illegal immigrants who have committed crimes.
At the same time, he has expressed sympathy for children who entered the country when their parents crossed the border without proper authority, the "dreamers" who so far are protected by an ordered signed by Obama.
'Massive tax relief'
Mr Trump voiced a need to persuade Americans to rally behind his agenda after a bitterly fought election, but he made his argument in terms of urging people to rally behind his effort for a "new chapter of American greatness."
Mr Trump said he wanted to provide "massive tax relief" to the middle class and cut corporate tax rates. But he did not offer specifics and failed to comment on the most pressing tax issue facing Congress, a proposed border adjustment tax to boost exports over imports.
Lawmakers have been looking to Mr Trump for more leadership on an issue that has divided corporate America and Republicans in Congress.
Mr Trump called on the Republican-led Congress to repeal and replace Obamacare with reforms that expand choice, increase access and lower costs.
Republicans remain divided on how to accomplish that goal and Democrats are ardently opposed to tampering with a system that provides health insurance for millions of low-income Americans.
Mr Trump's comments lacked detail, but it was the first time he publicly supported tax credits, a nod to health insurers who say they are necessary to keep people in the market.
Former Kentucky Governor Steve Beshear said in the Democratic response to Trump's speech that "you and your Republican allies in Congress seem determined to rip affordable health insurance away from millions of Americans who most need it".
In the most emotional moment of the night, Mr Trump singled out Carryn Owens, the widow of US Navy SEAL William "Ryan" Owens, who was killed in a raid on Al Qaeda in Yemen.
Owens, tears streaming down her face, clasped her hands and looked upward from her spot in the balcony as lawmakers and the president applauded her in the longest ovation of Mr Trump's hour-long speech.
Mr Trump said the mission that her husband participated in obtained vital intelligence that could be used against Islamic militants, taking issue with news reports quoting US officials who said little was gained from the raid.
Big infrastructure spend
Mr Trump pledged to bring $1 trillion in public and private investment to rebuild what he called America's crumbling infrastructure.
"To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States - financed through both public and private capital - creating millions of new jobs," Mr Trump said.
He gave no details on how the money would be spent.
Mr Trump said the United States had spent six trillion dollars in the Middle East - he did not say on what or over what time period - while US infrastructure deteriorated.
"With this $6 trillion we could have rebuilt our country - twice. And maybe even three times if we had people who had the ability to negotiate," Mr Trump said, reiterating his argument that his new administration will be better than previous ones at defending US interests when it comes to making a deal.
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Again without giving details, Mr Trump promised to introduce a "historic" tax reform.
He said this will cut corporate taxes on US companies "so they can compete and thrive anywhere and with anyone. At the same time, we will provide massive tax relief for the middle class".
He also repeated a promise to impose taxes on imports of foreign products so as to protect US industry.
"Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes - but when foreign companies ship their products into America, we charge them nothing or almost nothing," Mr Trump said.
He said he had a recent meeting with officials from Harley-Davidson who, he said, told him their motorcycles, in one particular unnamed country, are slapped with 100 per cent taxes.
"They weren't even asking for change. But I am," Mr Trump said. "I believe strongly in free trade but it also has to be fair trade."
Trump on NATO
The new leader spooked allied capitals during his campaign by arguing that US support for NATO should depend on members increasing defense spending, but has since been at pains to defend the pact.
"My job is not to represent the world. My job is to represent the United States of America," Mr Trump said, 40 days after taking office.
"We strongly support NATO," he said. "But our partners must meet their financial obligations.
"We expect our partners, whether in NATO, in the Middle East or the Pacific to take a direct and meaningful role in both strategic and military operations, and pay their fair share of the cost."
"And now, based on our very strong and frank discussions, they are beginning to do just that."
"In fact, I can tell you the money is pouring in," Mr Trump added in a departure from his prepared remarks.
