Dubbed Amazon Fire TV, the device is a small black box similar to Apple TV. It will cost $99 (£59) and is available immediately in the US.
It will allow consumers to stream content from Amazon's library, as well other video-on-demand services, directly to their TVs.
The device can also be used for gaming.Continue reading the main story Analysis Michelle Fleury BBC business correspondent, New York
Forget ratings wars, the biggest battle in your living room is for the TV.
To emphasise the point, at its launch event in New York, Amazon decorated the room with comfy armchairs, bowls of sweets and even a popcorn machine.
Fire TV, Amazon's Android based streaming gadget allows you to access content online.
With its matt black finish, the slim design is reminiscent of Apple TV and is supposedly three times more powerful.
The remote control has a microphone built in so that you can do voice searches. This worked smoothly even in a loud room full of journalists.
Amazon's set top box may not be revolutionary but it does give customers an alternative to Apple TV, Roku and Google's Chromecast.
"People play games on tablets but they want to play on TV," said Amazon's Peter Larsen.
The firm has formed partnerships with gaming firms such as Sega, EA, Disney and promises thousands of Android titles will be available next month. It is also expanding Amazon Games Studios to build bespoke games.
Users can buy a games controller, dubbed Voila, which looks very similar to an Xbox controller.
The move puts Amazon in direct competition with Apple TV and Google's Chromecast as all try to find a way into the living room.
The box comes with a Bluetooth-enabled remote, which means it does not have to be pointed at the TV to work.
Despite its ability to stream shows and films from alternatives to Amazon Instant Video - including Hulu, WatchESPN and Netflix - there are some big content providers missing from the list, notably HBO Go.