France’s three-time Olympic gold medallists Marie-Jose Perec and Teddy Riner then lit the Olympic cauldron, suspended on a hot-air balloon, before Canada s Celine Dion sang Edith Piaf s "Hymn to Love", in her first public performance in years, drawing huge cheers from the crowd.
The 30-metre (98 ft) high balloon carrying a 7-metre diametre ring of fire took to the air and was hovering dozens of metres above the ground.
It will be in the air from sunset until 2 am local time every day, organisers said.
A fleet of barges took the competitors on a 6 km-stretch of the river alongside some of the French capital s most famous landmarks, as performers recreated some of the sports to be showcased in the Games on floating platforms.
More than 10,500 athletes will compete at the Olympics, 100 years since Paris last staged the Games. Competition started on Wednesday and the first of the 329 gold medals will be awarded on Saturday.
While the celebration of French culture, fashion and history was warmly cheered by many of the 300,000 spectators lining the river, hundreds were seen leaving early as the rain fell.
With many world leaders and VIPs present, the ceremony was protected by snipers on rooftops. The Seine’s riverbed was swept for bombs, and Paris airspace was closed.
Some 45,000 police and thousands of soldiers were deployed in a huge security operation in Paris for the ceremony. Armed police patrolled along the river in inflatable boats as the armada made its passage along the Seine.
A mix of French and international stars, including soccer great Zinedine Zidane, 14-times French Open champion Rafa Nadal, 23-times Grand Slam champion Serena Williams and three paralympic athletes were among the last torchbearers before the cauldron was lit.
It will blaze until the closing ceremony on Aug. 11.
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