The $1 million upgrade was recently completed on the Anders' family-owned Aerial Tramway, which opened in August 1973. The new cars took the first visitors up last weekend.
The new cable cars were built in Switzerland and carry 120 passengers along the 2.1-mile route.
"This is one of the most sophisticated cable car systems in the world, and we are proud that Ober Gatlinburg continues to offer this unique form of transportation for visitors to the area to view the Smokies and the city of Gatlinburg," said tramway superintendent Danny Dixon.
The tram and ski resort is one of the top tourist destinations in the state, carrying over 18 million passengers since it opened.
The tram runs about every 20 minutes from downtown.