With a crowd of friends and family around her bed, Giffords opened her left eye on Wednesday and tried to look around.
Neurosurgeon Dr. Michael Lemole says Thursday that means Giffords is aware of her surroundings. She likely opened her eye because of the unexpected stimulation from so many people she knows.
Doctors have sat her up on the side of the bed and dangled her feet over the edge. They are backing off on medications.
Michael Lemole, called it "a major milestone," and said the congresswoman was clearly responding to the gathering of friends and family.
After five days of pushing for caution, Lemole said: "We're wise to acknowledge miracles."
The next milestone will be removing her breathing tube, and perhaps have her sit in a chair on Friday, said Dr. Peter Rhee, trauma chief at University Medical Center, who has treated soldiers in Iraq and Afghanistan.
Giffords was shot in forehead in an assassination attempt that killed six. The three-term Democrat still has a breathing tube in her throat and can't talk.
One of the most encouraging - and unexpected - moments of President Barack Obama's address to the nation Wednesday night, was the revelation that and that she "knows we are here, she knows we love her, and she knows that we are rooting for her."
Two of Giffords' congressional colleagues - Sen. Kirsten Gillibrand of New York and Rep. Debbie Wasserman Schultz of Florida - were also present in Giffords' hospital room when she opened her eyes. They described the moment to CBS' "The Early Show" Thursday.
(Scroll down to see video of Gillibrand and Wasserman Schultz, along with clips from Mr. Obama's speech.)
"We were talking about all the things we wanted to do as soon as she got better and all the things we hope to do with her. And we knew she was responding - she was holding our hands, and caressing our hands and squeezing them and moving her arms, moving her legs," Gillibrand recalled. "She started to open her eyes. And when her husband saw her making this effort, he urged her, said, 'Gabby, open your eyes, open your eyes.' And sure enough, she did."
Special Section: Tragedy in Tucson
Giffords' husband asked her to give a "thumbs up" if she could see the friends in the room.
"And a few moments later, she not only gave a thumbs up, she raised her whole arm. And it was just unbelievable and indescribable," Gillibrand said.
"This is a woman with the most remarkable determination," Wasserman Schultz said. "We were so excited when the doctors said, 'This is incredible progress.' [Giffords' neurosurgeon] Dr. Lemole outside the hospital room … he said, 'You know I don't really make much of emotion and friendship,' he said, 'but we saw the power of friendship in there.'"
Six people were killed and 14 were injured when a young man opened fire at a meet-and-greet event Giffords was holding at a busy Tucson, Ariz., supermarket.
Police say the man accused of the shootings, 22-year-old Jared Lee Loughner, shot Giffords as well as many in the line of people waiting to talk with her. The attack ended when bystanders tackled the man. He is in jail on federal charges as police continue to investigate.
Mr. Obama flew to Tucson Wednesday to meet with the injured and families of the slain and to try to soothe the nation in an address at the University of Arizona entitled "Together We Thrive: Tucson and America."
Obama: Rep. Giffords "Opened Her Eyes" Today
Loughner Stopped by Police Hours before Shooting
Gillibrand said that everyone present in Giffords' hospital room, but especially her husband Mark Kelly, were "just crying with joy" when Giffords opened her eyes.
"We know that she will overcome this. If anyone in the world can overcome an injury, of a severe nature, it's her," Gillibrand said. "Mark was telling us just a couple days ago how he was telling the doctors, she will be walking in a few weeks, you'll see."
"Shows you what a little bit of girl power can do," Wasserman Schultz said.