The 30m-tall Vega, which was designed in Italy and took nearly a decade to complete, lifted off at 10:00 GMT on its maiden voyage, which was to last 81 minutes.
The diminutive Vega, which can carry payloads of up to 2 500kg, completes the European family of rockets, which includes the heavy-duty Ariane 5 and the mid-size Russian-built Soyuz.
The rocket will release nine satellites into orbit on its maiden flight: Two Italian satellites and seven pico satellites provided by European universities.
The Vega was developed by seven European countries at a cost of nearly €790m ($1bn).
The last time the ESA launched a new rocket was on June 4 1996, when it carried out the first test flight of the Ariane 5.
That rocket exploded 40 seconds after lift-off from Kourou. An investigation later identified a software error.