The event kicked off with the Massed Bands of the Household Division playing for the 12,000 ticket holders and the thousands more on The Mall in London.
Pop star Robbie Williams then took to the specially-constructed stage around the Queen Victoria Memorial.
Stevie Wonder and Sir Paul McCartney are among the stars who have yet to perform before the Queen and other members of the Royal Family.
The Queen was not present for the first 90 minutes of the concert, taking her seat in the Royal Box at 21:00 BST.
The evening will end with the Queen lighting one of 4,500 beacons across the world marking her 60-year reign.
The concert is being broadcast live on BBC One and BBC Radio 2 in the UK and to millions around the world.
It is a joint venture between the BBC and Gary Barlow, who co-wrote Sing, the official song for the Diamond Jubilee celebrations.
Robbie Williams was followed on stage by Black Eyed Peas star Will.i.am, his fellow Voice judge Jessie J and boy band JLS.
Gary Barlow then took to the stage himself to perform a surprise duet with Cheryl Cole.
Next on the bill was Sir Cliff Richard, who performed a decade-straddling medley of hits and his 1968 Eurovision track Congratulations.
Singer Grace Jones surely deserved some herself for performing Slave to the Rhythm while spinning a hula hoop around her midriff.
The world of classical music has been represented by Chinese pianist Lang Lang, US soprano Renee Fleming and English tenor Alfie Boe.
Other artists who have performed include Annie Lennox, Ed Sheeran and Sir Tom Jones.
Dame Shirley Bassey performed Diamonds are Forever, while Kylie Minogue – dressed as a pearly queen – was joined by street dance crew Flawless.
She was followed by Sir Elton John, who sang such tracks as Crocodile Rock and Our Song in a sparkly pink jacket.
Later pop veterans Madness will perform Our House from the roof of Buckingham Palace – the same place that Queen guitarist Brian May played the National Anthem during the Golden Jubilee concert in 2002.
Between the music acts, hosting duties are being handled by Rob Brydon, Miranda Hart, Lenny Henry and Lee Mack.
The Duke of Edinburgh is not attending the event after being taken to hospital with a bladder infection.
“We all wish him the best for a speedy recovery,” said Sir Paul McCartney.
“I hear it’s not too bad.”
Speaking backstage, Sir Cliff Richard said he had enjoyed a “fantastic” view while performing on the £200,000 ($320,000) stage, designed by world-renowned architect Mark Fisher.
“When I looked down The Mall, the crowd seemed to go all the way up to the Admiralty Arch,” he said.
Musician and presenter Jools Holland was similarly enthused following his appearance.
“The memory I’ll have was the feeling of love off all the people,” he said.
“It’s a great unifier for everybody all over the island.”
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