Rossi announced his closely watched decision in separate interviews with KOMO News and The Associated Press and held campaign kickoff events in Issaquah, the heart of his old legislative district, and in Spokane.
A crowd of about 500 cheering partisans greeted Rossi's Issaquah announcement, which ended months of GOP anxiety over his hoped-for candidacy. He has a clear path to the party's nomination in the Aug. 19 primary.
"It's time for fresh air in Olympia," he said in an interview before the formal announcement. "I'm ready. I'm very excited about the prospect of changing this state."
Rossi, the former state Senate budget chairman and a real estate investor, said he's running as an agent for change in Olympia. In his view, Gregoire is an insider who is "the governor for the government, not the governor for the people."
Rossi, who turned 48 last week, came close to winning the governor's mansion in 2004, prevailing in the first two counts, only to lose in a hand recount by 129 votes. He later lost a court challenge aimed at forcing a fresh election.
He said he hasn't dwelled on the close race.
"I've moved on since then. I've been spending so much time with the family."
Republicans haven't won the office since John Spellman became governor in the Reagan landslide year of 1980.
Gregoire, a former three-term attorney general and state ecology director, is running for re-election, but doesn't plan to formally announce until after the 2008 legislative session. She has raised $3 million already and enters the race with the power of incumbency.
"I've never doubted he was going to run," Gregoire said. "So there's no surprise to me."
"Running against and incumbent is very different than running for an open seat because now an incumbent has a record," Rossi said in an interview with KOMO News. "It's fair to compare and contrast what the incumbent's done with what you want to do."
Rossi said he's upbeat about his chance.
"In 2004, I was introducing myself to the public and probably 80 percent of the people thought `Dino Rossi' was some kind of wine," he said in the interview. "Now that Gregoire is an incumbent, I will compare and contrast what she has done and what I will do. She has left a trail of broken promises."
He said the governor ran as an opponent of tax hikes and promptly raised a number of taxes after she was inaugurated. He said Gregoire famously said she would "blast through the bureaucracy," but has clung to the status quo.
"I want people to know what we're going to finish what we started," Rossi said of his own campaign.
"This is the opportunity to actually change the direction and culture in the state of Washington and turn it into a customer-oriented state, looking at citizens as the customers. This will be a big change from the incumbent, who has worked in state government for 38 years."
Rossi said his chances are excellent, even if it's a tough year nationally for Republicans.
Still, he said: "No matter what, I'll be an underdog. I'm running against an incumbent."
State Democratic Party Chairman Dwight Pelz said Rossi would undo significant progress made during Gregoire's first term on the economy, health care and energy policy.
"Dino Rossi is a Republican in the mold of George W. Bush, who would take Washington state backwards by steering us dangerously in the wrong direction," Pelz said in a statement.
The governor herself made a similar comment, stating her accomplishments speak for themselves.
"$2.2 billion shortfall to $1.5 billion surplus, unemployment down, investments in education, health care and economic development," she said. "All we have to do is ask ourselves 'are we better off today as a state than we were three years ago?' You bet we are. I'm not willing to go back to the old days."
Before formally announcing his intent to run, Democrats attacked Rossi's involvement in a foundation he started called Forward Washington. Democratic Spokesman Kelly Steele accused Rossi of campaigning illegally, calling the foundation a sleazy front group.
Rossi resigned as president of the organization last month and said it was set up to improve the business climate in our state.
"Governor Chris Gregoire and her political operatives were upset because some of the things were critical of what they were doing," he said. "So they're going to use the apparatus available to go after anybody who's critical. I'm not worried about that."
In comments prepared for his kickoff announcement, he took direct aim at Gregoire and described himself as a new leader for a new era.
"The state government we set out to change four years ago is more expensive and less effective at solving our problems," Rossi said. "It's going to take new leadership in Olympia."
He said he'll speak out against what he sees as Gregoire's biggest failures, including tax and budget policy, transportation, foster care, education financing, and dealing with criminals. He said he'll offer effective leadership on all those issues.
"The governor for the government has had her turn. We can do better," he said.
"This isn't just another election. It isn't just about Christine Gregoire or Dino Rossi. It's about whether we have the courage to try something new.
"My approach to being governor will be very different. I will bring with me a whole new set of people. We will work night and day to create a new attitude of public service in state government. State government will again become our servant instead of our master."
"I'm the governor. Let there be no question about it and I serve the people of the state of Washington and I do so proudly," Gregoire said in response.