Other stars, friends and collaborators also played his music, bringing both cheers and tears to the 5,000-strong audience, which included the Beatles' original producer Sir George Martin.
The first part of the show was specially composed by Ravi Shankar, Harrison's musical guru in his Beatles days.
Shankar told the audience: "I strongly feel that George is here tonight.
"How can he not be here when all of us who loved him so much have assembled all together to sing for him and play music for him."
As the smell of lighted incense filled the air, the sound of the sitar played by Shankar's daughter Anoushka resonated around the auditorium - a sound reminiscent of many of Harrison's Beatles compositions.
Eric Clapton, the musical director for the night, kicked off the Beatles hits to a huge cheer with a rousing rendition of I Want To Tell You, before being joined on stage by Joe Cocker and Dhani Harrison for Here Comes The Sun.
Tom Petty and the Heartbreakers played Taxman, with Jools Holland on piano and Sam Brown supporting.
Fan Carlos Brano outside the Albert Hall Clapton had the crowd on its feet to a standing ovation with the words: "Ladies and gentlemen, Ringo Starr," before the former Beatle ran on stage to huge applause.
He saluted the crowd before singing Photograph, which he co-wrote with Harrison, as Clapton, Jeff Lynne and Dhani played guitar.
Later, Starr joined Sir Paul McCartney to play the Beatles' hit I Love You. Sir Paul then brought a massive cheer from the crowd with the opening strains of Harrison's love song, Something.
He was joined on guitar by Dhani and Clapton, with Starr on drums.
After another standing ovation Sir Paul then played piano and Clapton sang to While My Guitar Gently Weeps, before ending with a two-minute guitar solo.
Dhani on guitar then started off My Sweet Lord, sang by Sam Brown, with fans clapping and dancing along.
Sir Paul told the crowd: "Olivia just said with Dhani on stage it looks like we all got old and George stayed young."
Dhani told the audience: "I just want from the bottom of my heart to thank all the musicians, you are my dad's best friends, he loves you. God bless you all."
Fan Carlos Brano outside the Albert Hall
Fans in Hollywood paid their respects
Joe Brown, who played on some of Harrison's albums, played the ukulele as all the artists joined in with confetti swirling around them.
Brown said: "It's designed to send you home with a smile on your face and a little bit of love in your heart."
The mood was lightened during part of the show with two sketches from Harrison's Monty Python friends.
Michael Palin, wearing a checked shirt, was accompanied by a choir dressed as Canadian Mounties as he gave a rousing rendition of The Lumberjack Song, to laughter and applause.
Stars in the audience included director Tim Burton, actress Helena Bonham Carter, Annie Lennox and Bob Geldof.
Hundreds of ticketless fans milled outside the venue before the show. Tickets for the event sold out within an hour and ticket touts outside were exchanging £150 tickets for as much as £700.
Most of the world's press were kept away from the concert itself, reflecting the desires of a private man who hated the attentions of the media.
Money raised from the night is going to the charity Harrison founded in 1973, The Material World Charitable Foundation.