The encyclical, the first to be published since Francis became pope, sets out the priorities for the Roman Catholic Church.
It's called "Lumen Fidei," which is Latin for "The Light of Faith."
The groundwork for the 84-page encyclical was laid by Benedict, the Vatican said in a media briefing, while Francis "added further contributions to the existing first draft."
The introduction to the text, which is divided into four chapters, reiterates the importance of having faith in a man's life, it said.
Francis writes that it is faith that helps man "distinguish from good and evil" and that he "who believes, sees."
He stresses that in modern times, faith has become more important than in the past.
In the first chapter, he refers to the biblical figure Abraham and explains faith as "listening to the Word of God, the call to come from the isolated self in order to open up oneself to a new life and the promise of the future."
Subsequent chapters talk about the connection between "faith and truth," evangelization and how faith is connected to the common good.
Vatican Radio said the encyclical completes a trilogy of papal teachings on the three theological virtues -- faith, hope and charity -- that was begun by Benedict with his encyclicals "Deus Caritas Est" in 2005, and "Spe Salvi" in 2007.
The encyclicals are circulated to Catholic bishops around the world and help outline the pope's thinking on doctrinal matters.
The Vatican has declared 2013 to be the "Year of Faith."
The latest encyclical is perhaps unprecedented in featuring the contribution of two living popes.
Benedict XVI shocked the Roman Catholic world in February when he announced his resignation, making him the first pope to stand down in almost 600 years. Popes usually serve until their death.
He has retired to a life of prayer and seclusion.
CNN's Hada Messia reported from Rome, and Laura Smith-Spark wrote in London.