The Queen has declared the London Olympics officially open, before seven young athletes were given the honour of lighting the ceremonial flame.
The show featured British celebrities and sportspeople, including David Beck ham and Bradley Wiggins, and screen characters Mr Bean and James Bond.
In a speech watched around the world, Games chief Jacques Rogge said: "The Olympic Games are coming home tonight."
Flag-bearer Sir Chris Hoy earlier led out Team GB to cheers and applause.
The identity of who was to light the symbolic flame was shrouded in secrecy ahead of the ceremony.
The group of seven, chosen by British Olympic champions, each lit a single tiny flame on the ground, igniting 204 petals, one for each competing nation or territory.