The Hollywood-style event on Saturday night, at a performing arts centre next door to the Ali Centre in Louisville, Kentucky, drew an adoring cast of actors, singers, athletes and even a former president, Bill Clinton - reflecting the champ's star appeal.
"You thrilled us as a fighter and you inspired us even more as a force for peace and reconciliation, understanding and respect," Clinton said.
Though frail, Ali still flashed his famous playfulness.
As Clinton praised him, Ali discreetly put two fingers in a V-shape behind the former president's head, drawing laughter from the crowd and Clinton.
Clinton said Ali was unmatched as a fighter: "No one was ever more beautiful or brash or bright or powerful or fast in the ring. It was breathtaking."
Ali entered the stage holding his wife's hand, and it was Lonnie Ali who spoke for him as the champ sat on a stool.
She said the centre's opening showed that "if you work hard and you believe in yourself, you can accomplish great things".
Video clips showed a brash, fast-talking Ali and his epic bouts.
Evander Holyfield (L) said Ali
inspired him to become a boxer
Another showed a trembling Ali, who is battling Parkinson's disease, lighting the torch at the Summer Olympics in Atlanta.
A parade of speakers said the three-time heavyweight champion displayed courage outside the ring for his stance on such fundamental issues as war, civil rights and religious expression.
"Some people are overwhelmed by their dreams, but Ali's dreams made him bolder and stronger and fearless," said veteran broadcaster Sir David Frost.
Frost said that Ali's response to racism "changed the way that black people were perceived around the world. His strength and his tenacity as a fighter captured the world's attention, but it was his insistence on his own value that made him a hero."
Bryant Gumbel said Ali showed remarkable character for his stance against the Vietnam war. Ali refused to serve in the military during the war, a stand that cost him his heavyweight title.
Gumbel said: "It took bravery to get into the ring and risk his pretty face, it took real guts to step out of the ring and risk everything."
Gumbel said Ali's "principled views" eventually won him the admiration of those who once reviled him.
Ali's stand against Vietnam war
cost him his heavyweight title
Actor Chris Tucker said he was star-struck by meeting Ali.
"You just inspired me and my whole generation," Tucker said.
Another former heavyweight champion, Evander Holyfield, said Ali inspired him to become a boxer.
"He meant so much for the sport and to the people," Holyfield said before the celebration.
Across the street, about 200 admirers chanted Ali's name when the champ arrived for the celebration. Ali struck a boxing pose and waved to his fans.
Tammie Vest, 37, of Louisville, remembered her family gathering around the television to watch Ali fights.
"He's a local hero," said Vest.
In a scene reminiscent of the era when Ali was in his prime as a fighter, a couple of peace activists protested against war - this time in Iraq.
"I hate boxing but I'm here for him," Carol Rawert Trainer said of Ali.
Trainer, who grew up in the Louisville suburbs, said she once considered Ali unpatriotic for his refusal to enter the military during the Vietnam war as a conscientious objector.
"He's a hero, one of the best people in the world as far as trying to bring peace to the world"
Carol Rawert Trainer.
American peace activist
"I was against Ali then as a military person," said Trainer, who joined the Air Force after high school in the 1960s.
She now sees Ali differently: "He was right and I was wrong to think the way I did," she said.
"He's a hero, one of the best people in the world as far as trying to bring peace to the world."
Lonnie Ali said in an interview on Friday that her husband hopes for a peaceful solution in Iraq. "He just wishes there could have been an alternative way to achieve what we wanted to achieve without going to war," she said.
Ali basked in adulation for the second time this month.
Lonnie Ali (L) says her husband
hopes for peace in Iraq
The 63-year-old fighter recently received the Presidential Medal of Freedom, the nation's highest civilian award, from President Bush, who called Ali "the greatest of all time".
Ali, born Cassius Marcellus Clay Jr in Louisville in 1942, learned to fight after having his bicycle stolen as a boy.
He won a gold medal at the 1960 Summer Olympics in Rome and went on to win the heavyweight title three times as a professional until retiring in 1981. He changed his name after converting to Islam.
Lonnie Ali has said her husband hopes the centre, an $80-million project, will inspire visitors, especially youngsters, to reach their potential and promote peace. The centre will open to the public on Monday.