Former senior judge Sir Anthony Hart opened the Historical Institutional Abuse Inquiry in Banbridge on Monday afternoon.
It will examine the extent of wrongdoing in a number of institutions including industrial schools, workhouses, and borstals.
Many were run by religious orders which at the time largely evaded scrutiny. As the inquiry got underway, Sir Anthony Hart called for openness from those alleged to be responsible.
He said: "This may be a challenging process for everyone involved but it is our hope that everybody, whether from government or from the institutions, who is requested to assist the inquiry will cooperate in a fair, a open and whole-hearted way so that this unique opportunity will not be wasted."
The probe was ordered by Northern Ireland's ministerial executive after the problem was found to be endemic across similar institutions in the Republic of Ireland and claims of mistreatment of victims north of the border.
The expert panel will investigate whether sexual, emotional or physical harm was inflicted upon children and if there were systemic failings by institutions or the state in their duties towards children in their care between 1922 and 1995.
More than 300 witnesses from the island of Ireland, Australia, and Great Britain are expected to give evidence. Most will give evidence in person, although some may only submit a written statement.
Two homes in Derry run by Sisters of Nazareth nuns will be the focus of early inquiry sessions - St Joseph's at Termonbacca and Nazareth House on Bishop Street.
The chairman gave his opening address on Monday, followed by a general overview of the questions and issues to be addressed from legal counsel to the inquiry Christine Smith QC, which is expected to last until Wednesday.
Ms Smith said the inquiry will give a voice to those let down by the system, adding: "There can be no keener revelation of a society's soul than the way in which it treats its children."
The inquiry hopes to finish taking evidence by June 2015. It is scheduled to complete its report and present it to the Office of the First Minister and deputy First Minister by January 2016.
The chairman is a retired senior judge who practised in Northern Ireland.
The other members of the inquiry panel are Geraldine Doherty, formerly the head of the Central Council for Education and Training in Social Work in Scotland, and David Lane, formerly director of social services in West Yorkshire.
Margaret McGuckin, spokesperson for Survivors and Victims of Institutional Abuse (Savia), was placed into Nazareth House, Belfast as a young child.
"We were placed into the care of the religious orders by the State and there were no inspections carried out - or very few or they would have found out that we weren't cared for," she claimed.
"They weren't capable of caring for us."
Our cries went unheard.
Margaret McGuckin, abuse survivor
"We were affected for the rest of our lives because of it."
Human rights campaign group Amnesty International has described the beginning of the Inquiry hearings as "a landmark along the road to justice for victims of institutional child abuse in Northern Ireland."
But the global charity has warned that not all abuse victims were covered by the inquiry, calling for the Northern Ireland Executive to set up new probes into allegations of clerical child abuse and abuse suffered by residents of workhouses known as the 'Magdalene Laundries'.
Patrick Corrigan, Amnesty's NI Programme Director, said: "Finally, victims will be able to tell their stories of abuse to an Inquiry empowered to get to the truth.
"Where there is sufficient evidence, we expect the Inquiry to pass files to the police for criminal investigation with a view to prosecution of abusers and those who colluded or covered up for them."
He highlighted: "Today we also remember the many abuse victims in Northern Ireland who are not covered by this inquiry: clerical child abuse victims who were abused at a parish level, rather than in a children's home, and women who suffered abuse in Magdalene Laundry-type institutions. For them, this inquiry offers nothing.
"Six months ago we brought representatives of these victims to meet Ministers at the Northern Ireland Executive to plea for justice. Six months on they have still heard and received nothing but tea and sympathy.
"The Northern Ireland Executive has an obligation to ensure a thorough investigation of all abuse allegations within this jurisdiction. Victims deserve nothing less."