President Reagan last night canceled today's inaugural parade and moved his swearing-in ceremony indoors to the Capitol rotunda, saying that record cold temperatures "would pose significant risks to the well-being" of participants and spectators.

The decision means that Reagan's inaugural address and oath-taking will be witnessed only by members of Congress and the Cabinet along with other dignitaries, shutting out more than 140,000 guests who were invited to watch the historic event on the Capitol's West Front.

Arctic air has brought below-zero temperatures to the area. Details on Page B1.

Officials were working feverishly throughout the night to set up an alternative event at the Capital Centre for the 12,000 people who assembled here from across the nation to take part in a parade, an American tradition since George Washington's inauguration in 1789. Reagan is expected to attend the Capital Centre event. Officials said they were uncertain whether any spectators would be allowed inside.

Reagan's decision came as temperatures in the capital plunged to a record low and fell below zero, and forecasters predicted a wind chill factor today of 30 below zero, making it the coldest Inauguration Day in history. Reagan said he made the decision after medical experts warned him of serious health dangers to marchers and spectators.

The arctic weather yesterday snarled the Metro subway system, kept many Washington area residents indoors and chilled spirits at some inaugural festivities, as guests arrived at parties complaining of being in pain from the cold and the wind. At a dinner at the Old Post Office building last night, many of the guests did not even take off their coats -- it was warmer inside than out, but not warm enough. One waiter was seen wearing rubber snow boots under his tuxedo.

Inaugural spokesman James Lake, announcing the decision to cancel the parade, said officials were "broken-hearted" because thousands of youthful marchers will be denied a "once-in-a-lifetime opportunity."

The decision cancels the most spectacular event of a $12 million four-day weekend of festivities and could prove costly to the inaugural committee, which spent more than $1 million just to construct a presidential viewing stand outside the White House, and millions more for logistics, security and housing the parade participants.

Lake announced that 25,000 people who had purchased seats along the parade route, at prices ranging from $12.50 to $100, will get refunds by submitting their tickets by Feb. 10.

In a written statement issued as he was having a pot roast dinner with his family at the White House, Reagan said that "medical and military experts have warned" that today's weather could "pose significant risks to the well-being of the many thousands of persons who plan to attend and work at these events."

"Under such conditions, exposed flesh can freeze within five to ten minutes, triggering considerable danger to many of the parade and ceremony participants, spectators and the general public. In addition, equipment would not be operable," the statement said.

Lake said that during Ulysses S. Grant's inaugural parade in March 1873, which was the coldest on record, many musical instruments were frozen.

Reagan said that "we look forward" to seeing many supporters at nine inaugural balls, which will go on tonight as scheduled. All the balls are open only to invited ticket-holders.

Early yesterday, White House and inaugural officials decided to cancel yesterday's major outdoor event, a youth pageant and fireworks display planned for the Jefferson Memorial, which Reagan was to attend. Then, after Reagan took the oath of office at midday, because the Constitution requires a Jan. 20 swearing-in, the officials began struggling with the question of whether the vast public ceremonies should go on.

At midafternoon, Lake said, three physicians were consulted: William Cooper, chairman of the inaugural health committee, Andrew McBride, D.C. commissioner of public health, and Lt. Col James Kirkpatrick, of the U.S. Army Medical Corps.

At 4 p.m., six senior officials met at Blair House across the street from the White House. They were Ronald Walker, chairman of the inaugural committee, White House counsel Fred F. Fielding, Lake and three White House officials working on the inaugural: William Sittman, Bill Henkel and John Rogers.

By 5:40 p.m., just before the president was to toss a coin to decide the kickoff for Super Bowl XIX, three of the officials walked over to the White House and told Reagan they thought the parade should be canceled and the oath-taking moved indoors.

"In view of the health considerations, there was no alternative," Lake said.

Reagan, described as "disturbed" by the medical risks, picked up the phone and called Sen. Charles McC. Mathias Jr. (R-Md.), chairman of the congressional committee that oversees the swearing-in.

Only two hours earlier, Mathias had led a shivering group of inaugural participants, including a choir and a metropolitan opera star, through a final rehearsal for today's planned swearing-in.

Winds whipped across the presidential platform, overturning chairs, sweeping away the senator's words and causing the choir one major problem: They could hardly breathe.

Lake said that after Reagan's call, Mathias spent some time trying to contact other members of the committee and House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.). By 8 p.m., Mathias was at the Old Executive Office Building working with Reagan aides to iron out details of the move to the rotunda.

The change means that only Supreme Court justices, members of Congress, Cabinet members, and the Reagan and Bush families will see the swearing-in and speech at the rotunda. "It will not be a public event any longer," Lake said, emphasizing that members of the public should not show up at the Capitol expecting to be admitted.

Asked if anyone other than dignitaries could attend the ceremony, Lake quoted Mathias as saying: "Anyone else who can get in would have to be mighty slim."

"It's just a mess," sighed Mathias spokesman Ann Pincus. "You think of all the people who have spent their money. . . . "

Officials said a luncheon with members of the congressional leadership, other dignitaries and six private citizens invited from around the nation will go on as scheduled.

Although many who came to see and march in the parade said they understood the reason for the cancellation, they were disappointed by Reagan's decision.

"We know this is the wisest thing from a health and safety standpoint," said Bob Haggett of the Norwood, N.Y., volunteer fire department brass band.

Earlier in the day, several in the lobby of the J. W. Marriott Hotel here said they would go to the parade no matter what the weather. "We're not going to come all this way and blow all this money and not go," said Orval Lundy, an Ohio state government worker. "We're going to go the whole gamut."

Preparations got under way immediately at the Capital Centre for the hastily scheduled alternative event for the disappointed thousands who had been set to march in the parade.

"It's a madhouse," an unidentified member of the Armed Forces Inaugural Committee said shortly before midnight as he surveyed the arena, which was still in its hockey rink configuration. "The TV people are down there right now, standing in the middle of the ice, arguing about who's going to have better camera position."

Capital Centre employes said early today they had been told to prepare the arena for a performance that could begin as early as 1 p.m. and would incorporate some of the units that had been scheduled to appear in the parade. President Reagan is expected to speak about 3 p.m., and the program is scheduled to conclude about a half-hour later.

Mike Long, supervisor of the crew that was working to cover the hockey rink and alter seating arrangements, said he was told to expect a crowd of about 9,000 or 10,000 in the arena's 17,000 seats. However, Gary Handleman, director of arena administration, said he was told by the White House to expect up to 14,000 people. Handleman said the arena must be cleared by 4 p.m., so it can could be made ready for a basketball game scheduled for 7 p.m.

Administrators from the D.C. government, which spent much of a $2.3 million appropriation from Congress on inaugural preparations, also expressed disappointment at the decision to cancel the parade. Tara Hamilton, a spokesman for the public works department, said that workers were "just about finished" clearing snow from Pennsylvania Avenue when word came that the parade had been canceled.

The inaugural ceremony was moved indoors at least once before, when snow and howling winds forced President William Howard Taft to take his oath in the Senate chamber in 1909.

The foreboding signs that led to the president's decision began building at dawn yesterday. The day opened with snow flurries, whipped by blustery winds. The temperature refused to budge above 9 degrees and at night plunged to a record of zero. Winds gusted up to 30 miles an hour, wreaking havoc all over the city.

The deep freeze proved too much for the Metro system. One line was shut down, and on others there were long delays. Ski shops reported runs on thermal underwear, and some visiting Republicans swore that, inauguration or not, nothing would get them outside Monday.

The National Weather Service was predicting a day of record-breaking cold today, with a morning low of zero and an afternoon high reaching only into the teens. The record low for the date was 2 degrees in 1893.

The "Arctic Express," as forecaster Scott Prosise called it, was bringing not only brutal cold straight from the North Pole but also westerly winds averaging 10 to 25 miles per hour, and gusting even higher.

At noon, the appointed time for President Reagan to complete the oath of office and begin his inaugural address, the temperature was expected to be 15 degrees.

In his statement, Reagan said, "Nancy and I are disappointed that the weather in Washington caused this change, but the health and safety of those attending and working at these outdoor events must come before any celebrations.

"It may be cold outside, but our hearts will always be warmed by the many wonderful memories of thousands of our fellow citizens coming to Washington this weekend to join us as we continue our work to make America great again," he said.

At midmorning, Reagan left the White House amid squalls to attend a national prayer service at the Washington Cathedral. There, his second term got the blessings and prayers of top religious leaders, including evangelist Billy Graham.

"There is a mandate higher than the ballot box, and it comes from the Almighty," Graham said.