For two evenings, thousands of musicians and dancers compete in the massive parade, called the "largest grass-roots festival in the world".
Fourteen schools took part in Sunday's competition, and seven of these will compete again on Monday, the final evening of Carnival.
A troupe from the coastal city's biggest slum used its entry to sing about the struggle to be happy amid crushing poverty, involving about 4,000 members of the group named after Rocinha, a sprawling hillside shantytown, or favela, with breathtaking views of Rio's bay.
Its costumes included the trappings of a poor girl's dreams: dresses made of gold coins and credit cards, hundreds of pink piggy bank hats, lollipops and chocolate bars.
Another school, Vila Isabel, sang about the mix of cultures in Latin America and the liberator Simon Bolivar.
It was co-sponsored by Venezuela's populist President Hugo Chavez, who did not attend the festivities.
Each school, with multicoloured costumed dancers bouncing and swaying to pulsing samba music, has 80 minutes to march through the stadium.
Schools are judged on choreography, their colourful floats and the enthusiasm and precision of their 300-strong drum corps. The current champion is Beija Flor, or Hummingbird.
Its theme this year is Water, and involves 4,500 participants who will impart the importance of water in several civilizations during their 80 minutes.
But most participants say they aren't out to win - just to dance all night.
"Carnival is all about getting a rush from the boiling energy of dancing for so many people," said Dandan Silva, 20, beads of sweat dripping from her forehead.
She was dressed in jewelled platform sandals that rose to the knee, a feather headdress and little else.
Drummers from her group, Salgueiro, wore hats of red and magenta ostrich feathers stuck into shiny white bicycle helmets adorned with strands of pink rhinestones.
Social customs are thrown out and roles inverted during the pre-Lenten bash that started on Friday and ends on Ash Wednesday.
During parties at the stadium and in city neighbourhoods, ordinary people dress up as royalty or in drag to celebrate before Lent, the period of repentance that lasts until Easter.
Samba schools use forklifts and metal baskets to put dancers on tiny pedestals that sprout upwards from tall floats. Thin columns of decorated scaffolding support the pedestals, which shake wildly as dancers gyrate to thundering drums.
"It's scary, they just put you up there without any rehearsals. But all the cheering people help you get over the fear," said Anne Rose, 32, a lawyer and Rio native.
Carnival, which draws on pagan and Christian heritage, is celebrated in other parts of Latin America and the Caribbean, but Brazil's is the most raucous and a popular tourism destination.
About 700,000 tourists, 20 percent of them foreigners, have come to Rio for this year's Carnival.
The event was kicked off on Friday to the sound of pounding drums and samba music outside Palacio da Cidade, the town hall, in Rio's southern Botafogo district in a ceremony hosted by Mayor Otavio Leite.