Toyoda, dubbed "the Prince" by Japanese media, took over as the company's president through official board action, CNN reported.
It has been 14 years since a family member ran the company, which foundered last year, posting its first annual loss in 70 years.
In the year ending March 31, Toyota lost $4.5 billion. To date, it has lost an additional $7.7 billion in the first quarter of the current fiscal year.
In its favor, "Toyota's current strengths are its technological improvements," said industry analyst Yoshiaki Kawano at CSM Worldwide.
"On the other hand, the company's weakness is dependence on the North American region and Japan," he added. "For getting into developing markets like China, they came in slower than Volkswagen and GM," Kawano said.