Mrs Clinton ran for the Democratic presidential nomination in 2008 but lost to Barack Obama.
The overwhelming Democratic favourite, she had been expected to declare her candidacy for months.
In a video on her website, Mrs Clinton declared: "I am running for president".
"Americans have fought their way back from tough economic times," she said, "but the deck is still stacked in favour of those at the top.
"Everyday Americans need a champion and I want to be that champion," she added
Analysis: Gary O'Donoghue, BBC News, Des Moines, Iowa
The launch of Hillary Clinton's campaign for the presidency was meant to be low-key.It was meant to reflect the idea that it was all about ordinary Americans and the everyday concerns of the middle class.
But whether she likes it or not, Mrs Clinton is a huge name in politics and reinventing herself as the embodiment of change won't be easy.
True, she is unlikely to face any stiff competition from her own side for the nomination, but Republicans have been unrelenting in their attacks on her and that will only increase.
She will also have to find a convincing vision for America that will capture the imagination of the voters.
Elections are usually about the future and Mrs. Clinton has to prove that she's not all about the past.
Twitter reaction
Is this Hillary Clinton's time?
Mrs Clinton has already had the backing of Mr Obama, who told a news conference at the Summit of the Americas in Panama on Saturday that she would make an "excellent president".
And her successor in the post of secretary of state, John Kerry, called her a "good friend", telling ABC's This Week programme she "did a terrific job of rebuilding alliances that had been shredded over the course of the prior years".
But the attacks from the Republicans have already begun.
Republican presidential contender Rand Paul criticised Mrs Clinton for her handling of a September 2012 attack on a US diplomatic compound in Benghazi, Libya, in which the US ambassador was among those killed.
He also said questions remained about funds received by a charity set up by Mr and Mrs Clinton.
Jeb Bush, former Florida Governor and brother of George W Bush who is also considering whether to stand as a Republican candidate, tweeted: "We must do better than Hillary."
Hillary Clinton - her Washington career so far
- Tried to reform US healthcare during husband Bill's first term as president (1993-1997) but her plan never reached a vote in Congress
- Stood by her husband when his affair with White House intern Monica Lewinsky was exposed, 1997-98
- Elected as Democratic senator for New York, 2000
- Voted in favour of the Iraq war in 2003 but later distanced herself from the war
- Ran for the Democratic nomination in 2008 but conceded in favour of Barack Obama
- Served as US secretary of state 2009-2013
- Embroiled in controversy over the attack on a US consulate in Benghazi, Libya in 2012
- Investigated by the State Department for her use of a private email server, circumventing legal requirements
- 54 minutes ago
- 6 hours ago
Take the quiz: My other life
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