The Pope was cheered by crowds as he entered and began speaking, at a weekly audience in a hall at the Vatican.
Pope Benedict said he resigned because he was aware of his own diminishing spiritual and physical strength.
Later he will hold what is expected to be his last public Mass, for Ash Wednesday, in St Peter’s Basilica.
Pope Benedict cited his advanced age and failing strength as reasons for stepping down at the end of February.
The 85-year-old pontiff will continue with his diary as usual until the day he officially retires, Vatican officials say.
By the end of Lent, in six weeks’ time, there is expected to be a new Pope.
The Pope is holding his weekly general audience at its traditional venue, the audience hall in the Vatican.
However, the afternoon Mass has been relocated.
The pontiff had been scheduled to celebrate Ash Wednesday at the small Sant’ Anselmo church, then lead a procession to Santa Sabina Basilica on Rome’s Aventine Hill.
The Vatican said the change to St Peter’s was to accommodate the crowds, but it will also save the Pope the effort of the procession.
“It will be an important concelebration, and the last led by the Holy Father in St Peter’s,” Vatican spokesman Federico Lombardi said.
Pope Benedict XVI will anoint the foreheads of the faithful with ashes, in a service attended by cardinals, bishops, monks, friars and pilgrims.
Ash Wednesday begins Lenten season, a period of penitence before Easter – celebrated this year by western Christians at the end of March and beginning of April.
The Vatican holds a Lenten retreat from 17 to 24 February. The Pope will hold one more Wednesday audience on February 27, again in St Peter’s Square.
At 78, Cardinal Joseph Ratzinger was one of the oldest popes in history at his election.
He took the helm as one of the fiercest storms the Catholic Church has faced in decades – the scandal of child sex abuse by priests – was breaking.
Pope Benedict XVI said in his Monday’s statement: “After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry.”
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