Boisterous crowds packed the once abandoned French Quarter for the climax of the city's 150th Mardi Gras festival as colorful floats and masked riders on horseback paraded down the busy route.
"Six months ago if you'd told me we would be here I'd say there's no way," said Jan Cogan, 54. "I think it's great," she said.
Much of the city still lies in ruin with an acute shortage of labour as one of the problems delaying the reconstruction. Resident Debbie Cryer, who is still waiting for her roof to be fixed, joined the party nonetheless.
"Everyone's been so stressed out," Ms Cryer told AFP. "This is making you forget everything for the moment," she said.
President of the New Orleans Tourism Marketing Corporation, Sandra Shilstone, said the traditional celebrations have been a welcome relief for the city.
"We didn't know what to expect, but this has been a wonderful Mardi Gras," Ms Shilstone said. "It's been a boost to the economy and to the spirits of the populace."
Crowd numbers down
Despite the enthusiasm of the revellers, crowds were thinner than usual with more than half the city's population still scattered across the country, skyrocketing rents forcing out some of those who have returned and very few hotels to accommodate tourists.
A few blocks from the parade route are vivid reminders of the August 29 storm that killed more than1,300 people and flooded 75 percent of New Orleans.
Entire neighborhoods have been left abandoned to the mold and rot from floodwaters that lingered for weeks.
Ash Wednesday marks the end of the party, when people must return to the stress of dealing with efforts to rebuild their own lives and New Orleans at large.
Many hope that positive publicity from the parade will bring tourism back to the city, New Orleans’ largest earning industry. Mardi Gras alone usually brings in about one million people and more than one billion dollars.
Business owner, Keith Cloye who has owned the Ol' Toones Saloon for 17 years is fearful that he may not be able to stay open much longer.
"It's been rough," he told AFP. "Every day something gets better. It's just getting started. We'll see how it goes," he said.
Many local business owners share Mr Cloye’s anxiety with sales down significantly. A little more than a third of the city's restaurants have reopened and a lack of staff is eroding New Orleans’ renowned service standards.