Mr O'Malley, who is also a former mayor of Baltimore, joins Hillary Clinton and Bernie Sanders in the primary race ahead of the 2016 US election.
"I'm running for you," Mr O'Malley told a crowd of around 1,000 people in Baltimore on Saturday.
He also pointed to his work as governor on issues such as gay marriage, immigration and income inequality.
"My decision is made. Now you will all have a vital choice to make next year, for the good of your families, and for the good of the country you love and carry in your hearts," he added.
The Democratic National Committee said it welcomed a candidate who had shown "solid commitment" to social justice.
Mr O'Malley, who endorsed Hillary Clinton's unsuccessful run for the Democratic nomination in the 2008 election, said that his party deserved a wide choice of candidates.
"The presidency is not a crown to be passed back and forth between two royal families,'' he said, referring to Republican and Democratic nominees Jeb Bush and Ms Clinton.
He said that he was joining the race for nomination because there was "urgent work" needed "to rebuild the truth of the American dream for all Americans."
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A few demonstrators gathered near his speech to protest against Mr O'Malley's criminal justice policies as Baltimore mayor.
"He's claiming to be this saviour of Baltimore, but he's not," protestor Duane Davis told The Associated Press.
Mr O'Malley has defended his previous "zero-tolerance" policies, saying that they helped tackle violent crime.
Critics have said that they contributed to the distrust between the police and the local black community.
Riots erupted in the city in April after the death of Freddie Gray while in police custody.
Former Maryland Governor Martin O'Malley has announced his bid for the Democratic presidential nomination.