The library in the West Humboldt Park neighborhood became the first public building named after Daley, who had served 22 years, the Chicago Tribune reported.
The Thursday ceremony marked the first time Emanuel and Daley have appeared together publicly since Emanuel became mayor in May.
But Emanuel said they had spoken privately several times and had dinner.
Emanuel called Daley "our mayor," said introducing him was "the greatest of honors that I have ever had" and thanked his predecessor for his public service.
DePaul University named a building after Daley and his wife, Maggie, while the former mayor was in office.
After the ceremony, Daley posed with people in the library in front of a painting of him reading from the 1909 plan for Chicago co-authored by Daniel Burnham and Edward H. Bennett.
The name of Daley's father, Richard J. Daley, appears on a Loop building that's part of the Cook County court system, a campus of the City Colleges of Chicago and an elementary school.