George Harrison became the third ex-Beatle inducted for his solo work. British jam band Traffic and the '50s harmony group the Dells were also honored.
It was clearly Prince's night, though, as he opened the ceremony with a trio of 1980s hits and came out later to upstage Tom Petty, Jeff Lynne and Harrison's son, Dhani, on "While My Guitar Gently Weeps."
Dressed in a white suit and displaying nimble dance steps, Prince performed three songs that caught the breadth of his work: the rock anthem "Let's Go Crazy," the topical "Sign O' the Times" and funk groove of "Kiss."
A restless perfectionist, the Minneapolis-based singer often played every instrument on his discs. He said he was preoccupied early in his career with maintaining his freedom.
"I embarked on a journey more fascinating than I could ever imagine, but a word to the wise to the young artists - without spiritual guidance too much freedom can lead to spiritual decline," he said.
He also warned youthful musicians: "A real friend and mentor is not on your payroll."
Chart-topping rappers OutKast and soulful singer Alicia Keys both cited Prince as influences.
"There are many kings," Keys said. "King Henry VIII, King Solomon, King Tut, King James, King Kong and the Three Kings. But there is only one Prince."
Browne co-wrote "Take it Easy" for the Eagles, then was successful on his own with "Doctor My Eyes," "The Pretender" and "Running on Empty," chronicling the turn of the 1960s utopian dream into the cynical '70s.
The "No Nukes" concert organizer has mixed the political with the personal throughout his career.
"I want to thank you for allowing me to put my personal politics in my songs," he said. "Music is a very empowering thing. I'm thankful for having had a lifetime doing it. Thank you for this job."
Bruce Springsteen inducted Brown, noting with some jealousy that while he and his E Street Band usually drew an audience filled with men - and not particularly good-looking men - Browne was a magnet for women. Springsteen called Browne a "bona fide rock 'n' roll sex star."
"Jackson was drawing more women than an Indigo Girls show," Springsteen said.
Browne performed "The Pretender," paused to thank his manager, then sang "Running on Empty."
Seger, who still lives in the Detroit area, burst from regional to national fame with the hits "Night Moves," "Old Time Rock & Roll" and "Like a Rock," the latter a longtime Chevy commercial theme.
Fellow Michigan singer Kid Rock inducted Seger, calling him one of music's most overlooked performers. In the Detroit area, Seger is God, Rock said.
"Bob Seger's music not only influenced me, it taught me to be proud of where I come from. I still am," he said. "He set the bar for all of us who came from the Midwest."
And he is appreciated back home, where many fans have been waiting for the Hall of Fame to enshrine their hero. As a bonus, Michigan Gov. Jennifer Granholm declared Monday "Bob Seger Day."
At the Waldorf, Seger brought up his Silver Bullet Band for their first public performance in nine years. They sang "Turn the Page" and the wedding staple, "Old Time Rock 'n' Roll."
Tom Petty and Jeff Lynne, two fellow members of the Traveling Wilburys, were on hand to salute Harrison. The guitarist joins John Lennon and Paul McCartney as Beatles who have been honored for their solo work.
Harrison's biggest hit, "My Sweet Lord," came in a burst of pent-up creativity following the Beatles' breakup. He recorded infrequently in the decade before his November 2001 cancer death, but a well-received posthumous disc came out in 2002.
"He often said he wasn't pursuing a solo career," Petty said. "He never hired a manager or an agent. He just loved playing music with his friends."
For all his solo albums, he was saluted with two group efforts, the Traveling Wilburys tune, "Handle With Care," and the Beatles song, "While My Guitar Gently Weeps."
Hirsute blues-rockers ZZ Top were an early MTV staple with the boogie hits, "Legs" and "Sharp-Dressed Man," helped by the presence of little-dressed women in their videos.
Rolling Stones guitarist Keith Richards gave a semi-coherent induction speech, praising the band's consistency and longevity. Richards wore a colorful headband and what appeared to be a collection of jewelry and fishing lures hanging from his hair.
Traffic featured teen prodigy organist Steve Winwood, who later went on to solo success. The pastoral, jazzy Traffic had hits with "Glad" and "Low Spark of High Heeled Boys."
Although former Traffic member Dave Mason was inducted, he didn't perform with the band.
The Dells, a vocal harmony quintet that hit with "Oh What a Night" in 1955, were the inspiration for the film "The Five Heartbeats." With only one personnel change, a group formed in high school is still performing together more than 50 years later.
Dells member Chuck Barksdale said he hoped the hall would open its doors to other vocal groups, like the O'Jays, the Manhattans and the Whispers.
Rolling Stone magazine founder Jann Wenner also received a lifetime achievement award.
As always, the Hall's selections are not without controversy.
Chubby Checker, whose song "The Twist" is one of the most popular dance records of all time, has yet to be inducted.
As rock legends rubbed elbows and swapped stories inside the Waldorf Monday, Checker, 62, stood outside on the pavement - protesting.
"I'm not doing it to get into the Rock and Roll Hall of Fame at all," said Checker, who does think the Hall should use a photo of himself to welcome visitors - a request that so far has been denied. "I don't get the airplay that one in my position deserves. 'Twist and Shout' gets more airplay than 'The Twist,' and that's not right."
The legendary performer - who is still recording and touring - complains that radio is ignoring his new material, even though his latest song, "Limbo Rock Remixes," has risen to No. 16 on Billboard's Hot Dance Singles Sales chart.
"Here's an old eagle laying new eggs, and I thought that radio would be ecstatic," he said. "But they're not."
Highlights of the Rock and Roll Hall of Fame awards ceremony will be shown Sunday on VH1, which like CBSNews.com, is part of Viacom.