Some 400 police officers backed by armour punched their way into Cerro-Cora, located just under the iconic Christ the Redeemer statue overlooking the city, as well as in the smaller, neighbouring favelas of Guararapes and Vila Candida.
Colonel Frederico Caldas told reporters on Monday that 190 members of a specially trained Police Pacification Unit would be deployed in Cerro-Cora a month from now.
He said the Pope's visit for World Youth Day, a major Catholic youth festival, in July "has led to an influx of tourists and this is why we are occupying the favela", he said.
"Intelligence agencies indicated that drug traffickers were seeking refuge here. Now they have lost their turf," the G1 news website quoted Caldas as saying.
Pope Francis's charisma and the fact that he is Argentinian are expected to lead to a big surge in the number of youths who will attend World Youth Day from July 23-28, according to organisers who now expect 2.5 million instead of two million participants.
It will be the second time the event is held in Latin America. Buenos Aires hosted it 26 years ago.
Authorities hope these units boasting a total of 12,500 officers will be operating in 40 shantytowns by 2014.