The left-leaning newspaper previously had a blue and white masthead and in 2005 had adopted a Berliner format, midway between a broadsheet and a tabloid.
"Our move to tabloid format is a big step towards making The Guardian financial sustainable," the paper's editor-in-chief Katharine Viner said in a piece for the first new edition.
Britain's Guardian newspaper is considering becoming a tabloid
She called it "bold, striking and beautiful".
The Guardian is selling or scrapping its three presses worth £80 million (90 million euros, $110 million) to cut costs and printing will be outsourced to tabloid-format presses run by Trinity Mirror media group.
The website, which attracts 150 million monthly unique browsers worldwide, has also undergone a redesign.
The company is aiming to break even by April 2019, mainly through cutting costs and boosting digital ad revenue to make up for a sharp decline in print ad revenue.
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