The Queen and members of her family looked on from the royal box at the star-studded event on Monday night.
They were without the Duke of Edinburgh who is treated in hospital for a bladder infection.
The three-hour concert, which was organised by Gary Barlow, celebrated music from the Queen's 60-year reign.
It was watched by 17 million television viewers in the UK at its peak.
Take That star Robbie Williams opened the show by belting out one of his biggest hits, Let Me Entertain You.
Performers from the present generation also appeared on stage, including Will.i.am, Jessie J, JLS and Ed Sheeran.
But it was the veterans Sir Cliff Richard, Elton John and Sir Tom Jones who got the crowds on their feet with renditions of classic songs from their repertoire.
Cheryl Cole also made a surprise appearance to accompany Barlow on his first appearance of the night.
Grace Jones performed her entire hit Slave To The Rhythm with a hula hoop, without it slipping.
Later Kylie arrived on stage dressed as a Pearly Queen, wearing a romper-style black shorts suit adorned with mother of pearl buttons. The Australian singer sang a medley of her dance tunes and was loudly cheered and whistled.
Stevie Wonder was given a big cheer when he came on stage and before starting to sing Sir Duke, he told the Queen: "This is for you, to celebrate your Jubilee, so honoured to be here. I love you and God bless you."
The palace was transformed into a row of terraced houses, via a projection, for Madness' roof performance of Our House.
The royals all stood for the final act, Sir Paul McCartney, who started off with a Beatles favourite Magical Mystery Tour. As he ended with Obladi Oblada he was joined on stage by all the acts from the night.
On stage, the Prince of Wales paid a heartfelt tribute to the Queen and remembered the Duke of Edinburgh ill in hospital.
A Diamond Jubilee is a unique and special event, some of us have had the joy of celebrating three jubilees with you, and I have the medals to prove it.
Prince Charles
Charles told hundreds of thousands who had gathered to watch the star-studded event that they were "celebrating the life and service of a very special person", addressing the monarch first as "Your Majesty", then "Mummy", which brought a huge cheer from spectators.
"The only sad thing about this evening is that my father cannot be her with us because unfortunately he's been taken unwell," he said.
"I was three when my grandfather George VI died and suddenly, unexpectedly you and my father's lives were irrevocably changed when you were only 26," he told the Queen.
"So as a nation this is our opportunity to thank you and my father for always being there for us.
"If I may say so Your Majesty, thank God the weather turned out fine, and the reason of course was because I didn't do the forecast," he also joked.
The Queen then lit the last of more than 4,200 Diamond Jubilee beacons dotted across the UK and the Commonwealth in celebration of her reign before a huge fireworks display was fired from the roof of the palace.
On Tuesday, she attended a service of thanksgiving at St Paul's Cathedral, where she was greeted by a tremendous fanfare.