The app, called 'Facebook Messenger', launched in the US only, allows members of the social networking site send instant messages on their mobile for free to anyone in their 'friends' list.
In a direct bid to rival BBM, the new Facebook app, also allows people to send messages to friends on their mobile contacts list and push out group messages too, the Telegraph reports.
The free Facebook Messenger app is available on both Android and iOS devices, but there are no dates revealed for when it would be made available outside the US.
Facebook engineer Lucy Zhang wrote a blog post explaining the new service, "More and more of us rely on our phones to send and receive messages. But it isn't always easy to know the best way to reach someone on their phone. Should you send an email or text? Which will they check first? Did they even get your last message?"
"We think messaging should be easier than that. You should be able to write a message, click 'Send' and know that you will reach the person right away," he added.
BBM is understood to have over 45 million users around the world.
Facebook, having over 750 million users worldwide, might be able to steal away some of it market share in the growing mobile instant messenger market, the paper said.