The culmination of the eight-day pre-Lenten bash fell nearly six months to the day after the Aug. 29 storm that smashed thousands of homes and killed more than 1,300 people, the vast majority of them in New Orleans.
"I lost everything," Andrew Hunter, 42, said as he sat on the steps of his ruined home on Jackson Avenue. "But what the heck. This helps us keep our spirits up, and we need all the help we can get with that."
Even amid the typical debauchery, including early morning drinking, flashes of bare breasts and skimpy costumes in the French Quarter, there was no escaping reminders of the storm.
Zulu, the 97-year-old Mardi Gras club, or krewe, paraded amid homes that still bear dirty brown water marks from the floodwaters that covered 80 percent of the city. Zulu lost 10 of its members to Hurricane Katrina, reports CBS News correspondent Byron Pitts.
Another krewe, Rex, King of Carnival, paraded past a boarded-up store bearing a spray-painted warning that looters would be shot.
As the Zulu krewe traveled through Uptown New Orleans, every table was full at world-renowned Café du Monde. General Manager Scott Escarra told CBS News.com's Christine Lagorio that the business, mostly selling coffee and beignets, has been at 70 percent of past years during Mardi Gras.
"But after the partiers go home, we keep the business open. How much business keeps up after tonight will be the real telltale sign for us of this city's ability to recover," Escarra said.
Kevin and Marie Barre, a husband and wife from New Orleans, wore white plastic coveralls bearing the all-too-familiar spray-painted "X" that denotes a home that has been checked for bodies. "It's a reminder. A lot of people who are coming down here don't understand what we've been through," Kevin Barre said.
Members of another club called the Krewe of MRE covered themselves with brown labels from the Meals Ready to Eat that were served to thousands who huddled in the Superdome after the storm. Others dressed as giant maggots, recalling the days when city streets were lined with abandoned refrigerators full of rotting food.
Mayor Ray Nagin, wearing a black beret and camouflage uniform, portrayed cigar-chomping Gen. Russell Honore, the military man who led the first big relief convoy into the city.
"It's been absolutely -- I don't know how to describe it -- great," Nagin said of the party. "Katrina did a lot of bad things. But it has done something to give New Orleanians a fresh love for their city."