The ceremony took place in Sukhumi, and was attended by South Ossetian President Eduard Kokoity on an official visit at the invitation of Abkhaz President Sergei Bagapsh. The foreign ministers of the two republics, Sergei Shamba and Murad Dzhioyev, also attended the opening ceremony.
"The embassy's work will add dynamism to bilateral cooperation between Abkhazia and South Ossetia," Bagapsh said.
"The two republics have common tasks - to gain independence," the president of South Ossetia said in turn. "We have matured, we are evolving, and we do not have to be led by the arm, like Kosovo."
The custom service and chamber of commerce and industry of both unrecognized states also signed cooperation agreements during the visit.
Georgia is seeking to regain control of Abkhazia and South Ossetia, which proclaimed independence following the break-up of the Soviet Union in 1991.
Georgian President Mikheil Saakashvili instructed the government on Saturday to draw up a plan for the implementation of his initiatives aimed at granting Abkhazia broad autonomy and establishing a free economic zone in the separatist province.
Ex-Soviet breakaway regions have stepped up their drive for independence since Kosovo's declaration of independence on February 17. Abkhazia and South Ossetia, along with Moldova's Transdnestr, have since asked Russia's parliament, the United Nations and other organizations to recognize their independence.