German Chancellor Angela Merkel was joined at the Brandenburg Gate by UK PM Gordon Brown, France's Nicolas Sarkozy and top US diplomat Hillary Clinton.
They warned human rights were still under threat for millions of people.
The wall's fall in 1989 saw Germany reunify, prompting the collapse of the Soviet Union and the Cold War's end.
Communist East Germany erected the 155-km (96-mile) concrete barrier in 1961 to encircle West Berlin and prevent its citizens from fleeing from the east into the capitalist enclave.
At least 136 people are thought to have been killed at the wall while trying to escape.
Ms Merkel - who grew up in East Germany - presided over Monday's celebrations.
She led a procession of leaders through the Brandenburg Gate - the symbol of German reunification in 1990.
Russian President Dmitry Medvedev, ex-Soviet leader Mikhail Gorbachev, former Polish President Lech Walesa and ex-Hungarian Prime Minister Miklos Nemeth were also among leaders, past and present, who attended.
Ms Merkel said the anniversary was a reminder to "take on the challenges of our time" - from poverty to climate change - and "the defence of human rights all over the world".
Mrs Clinton said the event was "a call to action".
"There are still millions across our world who are separated, maybe not by walls... but people who are separated from their loved ones, who are kept behind, who are locked behind bars," she continued.
She introduced a special video address from Washington by US President Barack Obama, who said the fall of the wall had been a clear rebuke of tyranny.
Mr Brown said: "Let me thank you, the people of Berlin, for showing that in a troubled world with an Africa in poverty, and a Darfur in agony, a Zimbabwe in tears and a Burma in chains, individuals even when in pain need not suffer forever without hope."
Tens of thousands of people braved rainy downpours to mark the events of two decades ago that transformed the political face of Europe.
Mr Sarkozy said the anniversary was "a call to fight oppression and to tear down all the walls that still separate the world, that divide cities, regions and nations".
Mr Medvedev said confrontation was in the past and now was the time to "build a different, new, better world".
After the leaders spoke, a chain of 1,000 giant foam dominoes - painted with messages of freedom by young people - was toppled along where the wall once stood.
The symbolic act was to reflect how the then Communist governments of Eastern Europe fell one after another.
The festivities were capped with fireworks and a concert featuring music from Berlin's State Opera and the American rock band Bon Jovi.
