Armed police and strict security measures were in place to protect revellers following a recent spate of terror attacks, with around 25,000 participants parading down Regent Street, many wearing flamboyant costumes, waving rainbow flags and holding colourful balloons.
Hundreds of thousands more were expected to party thorough the night around the Soho district.
"This is the biggest Pride in London's history and in Pride's history, there are more than 1.5 million people here today, and it's really important that Londoners are free to be who they want to be, free to love who they want to love," London mayor Sadiq Khan told AFP as he joined marchers.
"We've had a horrific few weeks with the terrible fire at Grenfell Tower and three terrorist attacks, and what today's about is love," he added.
"It's showing that actually the best antidote to the sadness, the sorrow, the bereavement, is having a great pride in London."
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Olympic diver Tom Daley was among those at the 45th edition of the London event.
"It's really important that we remember why Pride started -- it's not just to have fun, it's about making sure that we make political progress, and making sure that we try and get equal rights for every single person across the whole world," he told AFP.
Parliament's Palace of Westminster will also be illuminated with a rainbow flag for the first time to celebrate the event, while the multicoloured emblem also decorated tube stations and shops en route.
The Sexual Offences Act, approved by parliament on July 27, 1967, decriminalised homosexual acts in private between two men, both of whom had to be aged at least 21.
Marking the occasion, Norman Fowler, speaker of the upper House of Lords, said: "Homosexuality is still illegal in over 70 countries around the world.
"None of this will be solved by a march, or a display of lights in Westminster, but these acts will demonstrate to those who are being persecuted or abused that they are supported."
