Thousands of people have lined the streets of Melbourne to kick off Australia Day festivities in Victoria's capital.
Revellers waving Australian flags celebrated cultural diversity with a parade involving more than 60 cultural and community groups along the main streets of Melbourne.
A flag-raising event was held at the parade with performances from choirs, groups and bands.
Addressing the crowd, Victorian Governor Alex Chernov said the day was about celebrating aspects of the nation that make Australians proud.
Mr Chernov said Australia Day was a reminder of the opportunities and challenges that the country faces and a reminder to recognise indigenous history.
Parade attendee Nick George, 46, of Viewbank said he felt lucky to be an Australian.
"To be Australian is to work hard, to look after family and those in need," Mr George said.
"We have a lot of freedom and choices in this country."
Michael Mack, 50, of Wagga Wagga, said the need to keep emphasising multiculturalism in Australia was important.
Graeme Myers, 60, of Shepparton, said the Australian lifestyle and way of life made him glad to be an Australian citizen.
Mr Myers said he was pleased to be a part of the positive and electric atmosphere of the parade.
Multiculturalism was a key theme of the day, with nearly 4500 new Victorians making their pledges to become Australian citizens.
At a citizenship ceremony in Brimbank, Federal Opposition Leader Bill Shorten paid tribute to the contribution that different cultures have brought to making Australia what it is today.
"You have added your cultural energy to ours and enriched our national identity," Mr Shorten said.
"Because welcoming migrants is the driver of our national prosperity and the foundation of our national success."
In homes and parks across the state people celebrated with barbecues and backyard cricket.
A 21-gun salute and a wreath-laying service were held at the Shrine of Remembrance.
Two free concerts were held at the Sidney Myer Music Bowl, while on the foreshore in Torquay, a world record was attempted for the longest line of giant inflatable thongs joined in the water.
The Docklands hosted a fireworks display on Sunday evening and Australian Open title-holder Li Na was commended by Lord Mayor Robert Doyle for her win in Melbourne.
In the Kings Domain Gardens more than 450 vintage cars were on display with activities, food stalls and entertainment.
"We live in the best state in the greatest country on earth," Premier Denis Napthine said at the parade.
"Australia Day is an opportunity to come together and celebrate what it means to be Australian."