He has been a key player in legal challenges against EPA regulations on greenhouse gas emissions.
Democrats and environmentalists in the US have expressed dismay, calling Mr Pruitt a climate change denier.
News of Mr Pruitt`s appointment emerged on Wednesday evening. Mr Trump formally confirmed it in a statement on Thursday.
"For too long, the Environmental Protection Agency has spent taxpayer dollars on an out-of-control anti-energy agenda that has destroyed millions of jobs," Mr Trump was quoted as saying.
Mr Pruitt would "reverse this trend and restore the EPA`s essential mission of keeping our air and our water clean and safe", he said.
What Scott Pruitt believes
Mr Pruitt has sued the EPA on several occasions, most recently over Mr Obama`s Clean Power Plan, which aims to reduce carbon emissions from power plants.
He called the move "an unlawful attempt to expand federal bureaucrats` authority over states` energy economies in order to shutter coal-fired power plants".
And, writing in the National Review in May, Mr Pruitt said of climate change: "That debate is far from settled.
"Scientists continue to disagree about the degree and extent of global warming and its connection to the actions of mankind."
There is consensus among the majority of scientists in the field that carbon emissions from human activities are a key driver of rising temperatures and that the impact of climate change will be severe.
In the statement confirming his appointment, Mr Pruitt said Americans were "tired of seeing billions of dollars drained from our economy due to unnecessary EPA regulations".
He said he would run the EPA in a way that fostered "both responsible protection of the environment and freedom for American businesses".
Where does Trump stand?
Mr Trump, in a speech on energy on the campaign trail in May, castigated the Obama administration`s environmental initiatives. He promised to scrap "any regulation that is outdated, unnecessary, bad for workers, or contrary to the national interest".
He also pledged to "cancel" the Paris climate deal, which came into force in November.
The landmark agreement commits governments to moving their economies away from fossil fuels and reducing carbon emissions to try to contain global temperature rise.
But last month, in an apparent softening, he acknowledged in a meeting with the New York Times that there was "some connectivity" between human activity and climate change.
And as news of Mr Pruitt`s appointment was emerging on Wednesday, Mr Trump met actor and climate change activist Leonardo DiCaprio.
Terry Tamminen, CEO of the Leonardo DiCaprio Foundation, said they presented Mr Trump with a plan on job creation through "clean, renewable energy generation".
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