He said that attempts to marginalise faith must not be allowed to succeed if the country is to overcome its problems of social cohesion.
Secularists, such as Richard Dawkins, who try to rubbish religion are encouraging intolerance, the archbishop told a congregation of 2,000 at Westminster Cathedral.
"Faith is never a solitary activity nor can it be simply private," he said.
"Some today propose that faith and reason are crudely opposed, with the fervour of faith replacing good reason. This reduction of both faith and reason inhibits not only our search for truth but also the possibility of real dialogue."
Prof Dawkins has described Christian theology as vacuous and argued that faith and superstition are incompatible with the rigours of "logic, observation and evidence, through reason".
In a Channel 4 programme, the Enemies of Reason, he said: "Today reason has a battle on its hands. Reason and a respect for evidence are the source of our progress, our safeguard against fundamentalists and those who profit from obscuring the truth.
"We live in dangerous times when superstition is gaining ground and rational science is under attack."
Archbishop Nichols countered that those who portray faith "as a narrowing of the human mind or spirit" are wrong.
He urged that there should be "respectful dialogue" and that this needs to go "beyond the superficial and slogans".
"Let us be a society in which we genuinely listen to each other, in which sincere disagreement is not made out to be insult or harassment, in which reasoned principles are not construed as prejudice and in which we are prepared to attribute to each other the best and not the worst of motives."
The archbishop played a leading role in fighting the introduction of gay rights laws in 2006, which now make it illegal to discriminate against gay couples when placing children for adoption.
His intervention was one of a series of battles fought by church leaders over religious freedoms in Britain and against what they perceive as the advancing tide of secularism.
Archbishop Nichols claimed that the country would benefit from maintaining faith at the centre of public life, adding that it would help build a more cohesive society.
"As a society, if we are to build on this gift of faith, we must respect its outward expression not only in honouring individual conscience but also in respecting the institutional integrity of the communities of faith in what they bring to public service and to the common good.
"Only in this way will individuals, families and faith communities become wholehearted contributors to building the society we rightly seek."
He said "a community of faith reaches beyond ethnicity, cultural difference and social division".
Politicians, royals and church leaders attended the service, which saw Archbishop Vincent Nichols succeed Cardinal Cormac Murphy O'Connor as the 11th Archbishop of Westminster.
Dr Rowan Williams, the Archbishop of Canterbury, said relations between the Anglican and Roman Catholic churches had become "closer and warmer".
"The fact the archbishops have been able to meet is a welcome development, and a sign that we all recognise common challenges and the need to play and act together."
Earlier, the new Archbishop risked controversy on his first day in office when he said a report exposing decades of systematic child abuse by Catholic priests and nuns in Ireland would "overshadow" the good they had done.
He said it took "courage" for Catholic church members who abused children to face up to their actions.
Michele Elliott, chief executive of the charity Kidscape, said: "It is ludicrous. It should be a straightforward mea culpa.
"It is a moral stance, and he should say that it is all about the children and the rest of them be damned. There are no excuses for religious orders."
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