Ninety-six Liverpool supporters died in the crush at Sheffield Wednesday's stadium on April 15, 1989.
The Kop and the Centenary stands at Liverpool's Anfield Stadium were opened early for the official memorial service, which was due to begin at 2.45pm.
As numbers grew, part of the main stand was also opened to the public.
At 3.06pm, the exact time the referee blew the whistle and abandoned the FA Cup semi-final between Liverpool and Nottingham Forest, a two-minute silence was planned throughout Merseyside and in Nottingham's Old Market Square.
After complications with the victims' families, it was decided there would be no formal ceremony in Sheffield.
The Leppings Lane end of the Hillsborough ground, where the crush took place, was opened up earlier on Wednesday for people to visit and pay their respects.
Hundreds of floral tributes, scarves and football shirts of all colours were laid outside the Hillsborough memorial and tied to the Shankly Gates outside the Kop on Anfield Road.
Groups of people stood, hugged and some wept as they looked at the names of those who died in Britain's deadliest sporting disaster.
At the centre of the memorial burns an eternal flame, signifying they will never be forgotten.
Sue Joyce, 43, from West Derby, Liverpool, said: "We've come here today to show the victims and the families of those who died that we have not forgotten what they have suffered.
"It may be 20 years since the disaster took place but those that were there will always be in the thoughts of every Liverpool fan around the world."
As the families of the victims took their places on the Kop, the crowd of up to 25,000 people gave them a huge round of applause.
There were also loud cheers and clapping for a group of Celtic fans who laid two banners on the Anfield turf emblazoned with "Justice for the 96" and "You'll never walk alone".
Club officials then took their seats, followed by members of Liverpool's Academy.
As Pepe Reina led the first team out, there were huge cheers and applause.
Rafa Benitez followed with his wife, Montse, coach Sammy Lee, Jamie Carragher and Steven Gerrard.
There were also cheers and applause for Everton's manager, David Moyes, and Kenny Dalglish.
Opening the service the Bishop of Liverpool, the Rt Rev James Jones, told the crowd the Queen had sent a message that her thoughts and prayers were with them.
The Bishop said the tragedy "broke the heart but not the spirit" of the community.
He said: "On this, the 20th anniversary of the tragedy at Hillsborough, which broke the heart but not the spirit of our community, Her Majesty the Queen has asked me to say that her thoughts and prayers are with us and all those affected by the tragedy.
"For many here today it seems still like yesterday. Those we lost always in our minds.
"Never a day passes without a thought of what their tomorrow might have been, without that longing for justice for their sake as well as for ours."
In Exchange Flags - a public square behind the town hall in the heart of the city's business district - hundreds of men, women and children formed an impromptu circle of solidarity.
For some the emotion was too much.
They wiped tears from their eyes as thoughts were concentrated on the scores of families torn apart by Britain's worst sporting disaster.
When the silence finally ended spontaneous applause rang out.
People patted each other's backs, shared a word and returned to their day.