Crowds of more than 35,000 people attended the Anzac Day dawn service at the Australian War Memorial, gathering on a crispy autumn morning to pay tribute to veterans.
Victoria Cross recipient Mark Donaldson told the crowd that Australians had an obligation to the brave men and women who have served the nation.
"We honour their sacrifice by living a good life in support of others, respecting the freedoms given us and inspiring others to build a better Australia and a stronger Anzac spirit," he said in Canberra.
"We should strive to be worthy of these sacrifices made for us."
Corporal Donaldson received the country's highest military honour a decade ago, becoming the first person in almost 40 years to receive the award.
He received the honour for rescuing a coalition forces interpreter from heavy fire in Oruzgan Province in Afghanistan.
Anna Bean, whose father served in the 6th battalion, travelled interstate from Melbourne for her first service in the capital.
"We thought it would feel really special," she said.
Hours after the dawn service, with the sun high in the sky and flags at half mast, 10,000 people watched the Anzac Day march.
In his final Anzac Day address, Governor-General Sir Peter Cosgrove told veterans: "You matter. What you did matters."
Sir Peter sought to explain to youngsters and service first-timers the significance of the day, and what brings people back year after year.
"In the gamut of motives from the profoundly philosophical to simple curiosity, there is a fundamental reason," he told the crowd.
"It is by our presence to say to the shades of those countless men and women who did not come home or who made it back but who have now passed and to say to their modern representatives, the ones around the nation who today march behind their banners.
"You matter. What you did matters. You are in our hearts. Let it be always thus."
The former defence force chief said marching veterans passed on a silent message when catching the gaze of someone in the crowd.
"We did it for our nation, for what Australia stands for, we did it for you," he said.
"Let it be always thus."
More than a dozen wreaths were laid following Sir Peter's address, including by government minister Simon Birmingham on behalf of Prime Minister Scott Morrison.
Sir Peter will be replaced by current NSW Governor David Hurley when his five-year commission comes to an end in June.
