Advertisements will be shown only in the app's Updates tab, which is used by as many as 1.5 billion people each day.
However, they will not appear where personal chats are located, developers said.
"The personal messaging experience on WhatsApp isn't changing, and personal messages, calls and statuses are end-to-end encrypted and cannot be used to show ads," WhatsApp said in a blog post.
It is a big change for the company, whose founders Jan Koum and Brian Acton vowed to keep the platform free of ads when they created it in 2009.
Facebook purchased WhatsApp in 2014 and the pair left a few years later.
Parent company Meta has long been trying to generate revenue from WhatsApp.
WhatsApp said ads will be targeted to users based on information like the user's age, the country or city where they're located, the language they're using, the channels they're following in the app, and how they're interacting with the ads they see.
WhatsApp said it will not use personal messages, calls and groups that a user is a member of to target ads to the user.
It is one of three advertising features that WhatsApp unveiled on Monday as it tries to monetise the app's user base.
Channels will also be able to charge users a monthly fee for subscriptions so they can get exclusive updates.
And business owners will be able to pay to promote their channel's visibility to new users.
