The two Galileo satellites were launched by a Russian Soyuz rocket from its new base in French Guiana at 07:30 local time (10:30 GMT; 11:30 BST).
The European Commission (EC) is investing billions of euros in its own version of the American GPS system.
It expects Galileo to bring significant returns to EU nations in the form of new businesses that can exploit precise space-borne timing and location data.
The Soyuz mission was a long one - it took three hours and 50 minutes to get the satellite pair into their correct orbit 23,000km above the Earth.
The spacecraft are pathfinders for the Galileo system as a whole.
Together with another pair of satellites to be lofted next year, they will prove that Galileo works as designed, from the spacecraft in the sky to all the control and management operations on the ground.
"This phase is called in-orbit validation - IOV," said Javier Benedicto, the Galileo project manager at the European Space Agency (Esa), the EC's technical agent on the project.
"The intention is to test and verify the various system functionalities and the ultimate system performance," he told BBC News.
Deployment of the full Galileo system is likely to take most of the decade.
Sat-nav users themselves will not immediately see any benefits from Galileo, however. That will have to wait until a navigation signal is switched on, and it is likely to be 2015 before there are enough spacecraft in orbit for Galileo to start to show its true capability.
Compared with the Americans' current version of GPS, Galileo carries more precise atomic clocks - the heart of any sat-nav system.
In theory, the data transmitted by Galileo should therefore be significantly better than its US counterpart. Whereas a position fixed by the publicly available GPS signal might have an error of about 10m, Galileo's designers promise metre-scale accuracy when full deployment is achieved.
But the plan is to make the different systems interoperable, meaning the biggest, most obvious benefit to users will simply be the fact that they can see more satellites in the sky at any one time.
So, as the decade progresses and the number of spacecraft in orbit increases, the performance of all sat-nav devices should improve. Fixes ought to be faster and more reliable, even in testing environments such as big cities where tall buildings will often obscure a receiver's view of a transmitting spacecraft.
- A large antenna will transmit signals to users on the ground
- Distress signals are picked up by a search and rescue antenna
- Another antenna receives information on the status of Galileo
- The spacecraft is controlled from the ground via telecommands
- Sensors make sure the satellite is always pointing at Earth
- Further sensors keep an eye on where the Sun is in the sky
- A laser retroreflector can determine the satellite's exact height
- Radiators expel excess heat to protect electronics from overheating
Galileo was famously called the "Common Agricultural Policy in the sky" by one British politician infuriated by the price of the project.
It is presently running about a decade behind schedule, and it will cost in excess of five billion euros to put the full constellation (27 satellites and three spares) in orbit before 2020. Ongoing running costs, including the renewal of worn out spacecraft, are estimated to be about 800 million euros a year.
But the EC maintains this expenditure will be dwarfed by the economic returns of having improved sat-nav.
Few people perhaps recognise the full extent of GPS usage today. Sat-nav is not just about drivers trying to find their way on unfamiliar roads - banks employ GPS time to stamp global financial transactions; and telecommunications and computer networks are synchronised on the "ticks" of the satellites' atomic clocks.
Indeed, Britain's Royal Academy of Engineering issued a report earlier in the year that said the UK economy had become dangerously over-reliant on satellite-navigation signals, and that too many applications had little or no back-up were these signals to go down.
In that sense, having a second system that is separate but compatible with the US GPS network should make applications more robust.
"Nevertheless, like GPS, the Galileo signal is transmitted from over 10,000 miles above the Earth's surface, and Galileo therefore shares many of the vulnerabilities that the academy described in its recent report," said lead author, Dr Martyn Thomas.
"The report recommended investment in a high-power, terrestrial, low-frequency alternative to GPS and Galileo. The best candidate remains the enhanced Loran system, eLoran, that has been researched and developed in the UK by the General Lighthouse Authorities."
Pad beauty
Galileo should have three services available by mid-decade: one that is open and free to anyone with compatible receiver equipment; another that is encrypted and for use by law enforcement and other government agencies; and a third application dedicated to search and rescue (SAR).
This last service would enable sailors in distress, for example, to transmit their position and receive an acknowledgement that help is on its way.
The technology for SAR on Galileo was supposed to be being provided by China until late technical and political disagreements prompted the EC to look for alternative sourcing. As a consequence, the first two spacecraft will fly with dummy SAR payloads.
Friday's launch was doubly significant because it marked the first time a Russian Soyuz rocket had launched from Western territory.
A new spaceport costing half a billion euros has been fashioned for the rocket in French Guiana's jungle landscape.
"Some people say it is a beautiful launch pad. I don't know about that, but it is certainly very impressive," Jean-Marc Astorg, who led the Soyuz in French Guiana project for the French space agency (Cnes), told BBC News.
- Like Baikonur, Sinnamary has a large flame bowl under the pad
- A key difference is the mobile gantry, withdrawn prior to launch
- Soyuz receives a big boost by launching closer to the equator
- Rockets are brought to the pad along a 700m-long rail line
- The segments of a Soyuz are assembled in the MIK building
- Launch control is just 1km from the pad, in a secure bunker
- Other buildings on the 120ha site include propellant storage areas
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