Princes from Europe, Africa and the Middle East were among the royal representatives who flew in for a day of festivities marking the final phase of Albert's ascension to the throne of Monaco's 700-year-old dynasty.
Under a bright blue Mediterranean sky, the day started with a solemn Mass at Monaco's 19th-century cathedral and was to end in the evening with a gala performance at the opera, followed by fireworks above Monte Carlo's famed casino.
Wearing a royal ceremonial military uniform, a grave-looking Albert blinked back tears after kneeling to receive a blessing at the end of the Mass, which was led by the archbishop of Monaco, Monsignor Bernard Barsi.
"By rising to the Grimaldi throne, Prince Albert finds his place in the continuity of this dynasty and with the help of God, carries forward the destiny of the principality dating more than seven centuries," Barsi said between strains of organ music and Handel's Messiah.
Hundreds of Monaco residents watched the ceremony on a giant screen outside the cliff-top palace, near the cathedral. Many waved Monaco's red-and-white national flag.
For Albert and his sisters, Princesses Caroline and Stephanie, it was a poignant event in the same cathedral where their father and their mother, Hollywood star Grace Kelly, were married and are now buried.
Barsi paid tribute to Rainier and Grace in his homily and noted that "this cathedral has known the joys and the pains of this principality."
Both princesses wiped away tears during the ceremony.
"It's very moving," Stephanie told TF1 television after the Mass. "I was thinking above all of my brother and what this represents for him, for our country."
"It's a new beginning for all of us in the family," she said.
Albert, 47, automatically took royal powers upon the death of his father in April and was appointed His Serene Highness in July, when he was sworn in before the people of Monaco in the first of a two-part investiture ceremony.
This round of festivities coincided with Monaco's national day Saturday and was intended as Albert's coming-out party before foreign dignitaries and royalty. Among those present were Britain's Prince Edward, Prince Joachim of Denmark, Prince Moulay Rachid of Morocco and Prince Faisal of Jordan. Iceland's President Olafur Ragnar Grimsson was the only head of state to attend.
For Albert and many others in Monaco, the day marked an emotional farewell to Rainier, Europe's longest-serving monarch, who ruled Monaco for 56 years until his death at the age of 81.
An afternoon ceremony outside the royal palace marked the symbolic transfer of power, with Albert presiding for the first time over Monaco's national day military review.
Standing at attention, Albert was presented with a royal standard, or banner, bearing his emblem, while Rainier's standard was presented to the royal guard one last time and marched inside the palace gates.
Rainier was credited with transforming the principality from a sleepy seaside resort into a center of finance and tourism. It was Rainier's 1956 wedding to Oscar-winning movie star Kelly that endowed Monaco with its glamorous image.
Albert, long secretive about his personal life, has spoken openly about having fathered a child out of wedlock with a former flight attendant from Togo, a mini-scandal that first surfaced on the cover of a French magazine shortly after his father's death. The child will never take the throne and will not bear the name of the Grimaldis.
Later Saturday, Albert, a devoted soccer fan, planned to attend a match between Monaco and Saint-Etienne, followed by a performance of Rossini's opera "Voyage to Reims" at the grand Monte Carlo Opera.