In frigid weather, athletes from the two Koreas marched into the stadium together, fuelling hopes for peace between the two nations technically at war since the 1950s.
The Winter Games officially opened in South Korea on Friday, with national figure skating superstar Kim Yuna lighting the Olympic cauldron in Pyeongchang.
The opening ceremony of the 23rd Winter Olympics was held in frigid weather with athletes from the two Koreas marching into the stadium together, fuelling hopes for peace between the two nations, split for more than six decades.
South Korea, which is using the Games to break the ice with the North, seated its presidential couple alongside US Vice President Mike Pence and his wife, with two of the North's most senior officials sitting in the row behind during the opening ceremony.
The South is still technically at war with the North after the 1950-53 Korean War ended in a truce, and the United States and North Korea have recently swapped nuclear threats. Pence vowed just this week to tighten sanctions on the North.
President Moon Jae-in, who wants to pave the way for talks over the North's nuclear and missile programme, warmly shook hands with Kim Yong Nam, the North's nominal head of state, as well as North Korean leader Kim Jong Un's sister, Kim Yo Jong.
She was the first member of North Korea's ruling family to visit the South, while Kim Yong Nam was the most senior North Korean official to make a cross-border trip.
The pair will have lunch with Moon at the Blue House on Saturday, Moon's office said.
K-pop and steaming soups
Moon officially declared the Olympics open, followed by a burst of fireworks.
At the opening ceremony, North and South Korean athletes marched under a unified peninsula flag for the first time in a decade.
Spectators huddled under blankets and slurped steaming fishcake soup to ward off the cold. Temperatures in South Korea this month have dropped to -20 degrees Celsius at night, sparking concerns about the risk of hypothermia.
Pence stood to welcome the US athletes as the Korean pop hit Gangnam Style blared around the stadium, sparking the 'Horse Dance' in the crowd and among the volunteers.
Nearly 500 North Koreans have arrived in South Korea for the Olympics, which run until Feb. 25 and have drawn athletes from 93 countries.
On the margins of the ceremony, the atmosphere was less cheerful.
Hundreds of anti-North Korea protesters scuffled with riot police not far from the main stadium before the opening ceremony began, with some of their banners reading "Moon regime is leading Korea to destruction".
Two impersonators dressed up as US President Donald Trump and North Korea's Kim Jong Un were also swiftly ejected by security staff.
As he was escorted out of the stadium, the Kim Jong Un impersonator quipped: "Is my sister getting the same treatment?"