Canadian Prime Minister Stephen Harper welcomed them to an afternoon program Friday at Parliament Hill as "the world's most famous newlyweds" and said they represent "our unbreakable link with our past and our unqualified optimism for the future."
The crowd many dressed in Canada's red and white colors — exploded in prolonged cheering and chants of "Will and Kate, Will and Kate." A few wore homemade crowns in a nod to the royals.
The royal couple, who married in April and are on their first official overseas tour, beamed.
In his speech marking Canada's 144th birthday, the prince talked of his and Kate's family ties to Canada — in French and English, as he had a day earlier.
He said that Kate had learned about Canada from her late grandfather, "who held this country dear to his heart for he trained in Alberta as a young pilot during the Second World War."
On his side, he spoke of his grandmother, Queen Elizabeth II. The queen, he said, "has asked me to convey her warmest good wishes to the people of Canada, and her happy and abiding memories of being on Parliament Hill with Thee Duke of Edinburgh one year ago."
The prince referred to his grandmother as "the queen of Canada," since she remains Canada's head of state, drawing a loud cheer from the crowd.
He said the queen was watching their Canada tour with interest.
Kate wore the same dress that she wore in her official engagement photos, a cream-colored dress from London designer Reiss. But for her Ottawa appearance, she added the queen's Maple Leaf brooch and a brilliant red hat topped with a maple leaf. The queen loaned the brooch to the duchess for the tour; it was first worn in 1951 by the then-Princess Elizabeth on her first visit to Canada.
Prince William wore an understated blue suit and a red tie.
Police estimated that some 300,000 people were gathered around Parliament Hill to watch the Canada Day show.
A 21-gun salute to Canada's and military plane flyovers were part of the pageantry.
When two F-18's did a flyby, Kate mouthed "that scared me" and put her hand to her heart.
At breaks in the official program, the crowd erupted into the cheer "Will and Kate, Will and Kate." There also were cheers of "Prince William, Prince William," suggesting that the young prince was charming his Canadian audience as much as his new bride was.
Before leaving Parliament Hill, the royal pair walked toward the barricades holding back the public and shook hands and chatted with the people, some of whom had waited through the night. Several gave Kate flowers and small, wrapped gifts.
Greg Kolz, 33, shook hands with both William and Kate and got so nervous that he wished William a "merry Christmas."
"His response was 'that was brilliant' and that he had done that once or twice himself," he said. "We did a bit of a high five and then I collected myself enough to wish him a happy Canada Day."
Courtney Young, 20, said William and Kate make the monarchy relevant to her generation.
"They are rock stars. They are a modern couple," she said. "With Prince Charles coming in, my generation didn't really feel it. Kate is one of us. It makes it more real. And it's a modern day fairy tale."
Friday also would have been the 50th birthday of William's mother, Princess Diana, who died in a 1997 Paris car crash. In London, her admirers gathered to leave gifts outside Kensington Palace, which was her official residence.
Signs carried by the crowd included "Canada loves Will and Kate" and "Happy Birthday Lady Di. Canadians love you."
Joan Milovick, 65, traveled to Ottawa from the Toronto area with three of her sisters and met William during a walkabout. Her sister gave William flowers to give to Kate.
"He seemed so genuine, so much like his mom," Milovick said, getting teary-eyed. "Very glamorous, very much like Diana was."
The Duke and Duchess of Cambridge, as they are officially known, later attended the evening portion of a Canada Day concert and were visible to thousands via a giant television screens. Kate wore a purple Issa Jersey dress.
Some Canadians refused to give up an unofficial Parliament Hill Canada Day tradition — as the music carried on, the smell of marijuana wafted through the cooling night air.
They royal couple began the day Friday by joining in the ceremony for people who became Canadian citizens.
As they emerged from their motorcade at the Canadian Museum of Civilization to a raucous welcome. The pro-royal spectators broke into spontaneous renditions of "O Canada" and "God Save the Queen" to drown out a handful of protesters who oppose requiring new Canadian citizens to pledge allegiance to the queen.
At the museum, the royal pair watched as 25 people from 14 countries became Canadian citizens. They handed out red and white maple leaf flags to the newly minted Canadians, then participated in a reception for the new citizens and their families.
During the visit, William, a helicopter pilot, will take part in a water landing demonstration, and the couple is scheduled to put on aprons and take part in a cooking workshop in Quebec City. They also will open the world-renowned Calgary Stampede.
Some anti-royal protests were expected in the French-speaking province of Quebec, with small groups planning protests in Quebec City and Montreal.
The prince and Kate jet to Los Angeles on July 8 and will host a gala dinner there the next night to introduce up-and-coming British film talent to Hollywood executives.