The crowds cheered and applauded as Kate, 42, who has been receiving treatment for an undisclosed form of cancer since late February, was joined by her three children, Prince George, Princess Charlotte and Prince Louis, in a carriage for the traditional procession.
She was surrounded by other members of the family, with her husband the Prince of Wales, Colonel of the Welsh Guards, on horseback, as were the Princess Royal, Colonel Blues and Royals, and the Duke of Edinburgh, Colonel Scots Guards.
And in another change, the King, 75, travelled in a carriage with his wife, Queen Camilla, 76, instead of riding horseback amid his ongoing cancer treatment.
WATCH: Princess Kate makes first public appearance
Meanwhile, the Duchess of Edinburgh was accompanied by her daughter, Lady Louise Windsor, 20, and the late Queen Elizabeth's cousin, the Duke of Kent.
The impressive display of pageantry at Horse Guards Parade saw over 1,400 officers and soldiers form the parade, together with two hundred horses. Meanwhile, over four hundred musicians from ten bands and Corps of Drums marched and played in unison.
Despite the torrential rain, the royals were in high spirits as they made their way back to Buckingham Palace in their carriages, with George, Charlotte and Louis waving enthusiastically to the crowds. Six-year-old Louis also made mum Kate giggle with his dancing during the ceremony.
Ahead of her appearance, the Princess shared a personal update about her progress in a letter released on Friday, she wrote: "I'm looking forward to attending the King’s Birthday Parade this weekend with my family and hope to join a few public engagements over the summer, but equally knowing I am not out of the woods yet."
Meanwhile, a spokesperson for Buckingham Palace said: "His Majesty is delighted that The Princess is able to attend tomorrow's events, and is much looking forward to all elements of the day."
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The Prince and Princess of Wales also shared an incredibly moving video of Kate and their children waiting for their carriage at the palace, with the Princess tenderly playing with her daughter Charlotte's hair.
See all the best photographs and moments from the day...
Staff prepared the balcony with the iconic red and gold drapes. The royal family will gather together to watch the military spectacle after the procession.
Kate wore a white dress with black bow detailing by one of her go-to British designers, Jenny Packham, and a wide-brim saucer-style hat by Philip Treacy.
The Princess wore pearl earrings with her ensemble and her Irish Guards Regimental Brooch.
Kate is Colonel-in-Chief of the regiment and wrote a heartfelt apology letter as she was unable to take the salute at the Colonel's Review on 8 June ahead of Trooping the Colour.
The Duke and Duchess of Edinburgh were pictured travelling in a car with daughter, Lady Louise Windsor, who was last seen at the Royal Windsor Horse Show in May.
Sophie looked lovely in a yellow ensemble while Edward donned military uniform.
Lady Louise, 20, rewore her floral Suzannah London silk dress from King Charles' coronation.
William and Kate's youngest child peeked at the crowds from the car. Louis, who turned six in April, always manages to steal the show at major royal events.
Royal mum and daughter Kate and Charlotte had a matching moment in nautical-style white and navy outfits with similar shoes as they exited the carriage to watch the ceremony from the Major General's Office at Horse Guards Parade.
Her Majesty opted for a pale green silk crepe dress and coat from Anna Valentine and hat by Philip Treacy, finished with her Grenadier Guards military brooch.
After the ceremony, the royals travelled back to Buckingham Palace in their carriages, with Lady Louise this time taking shelter under cover from the torrential rain with Sophie and the Duke of Kent.
In recent years only senior working royals have appeared on the balcony for major royal moments, in a departure from Queen Elizabeth II's reign when she would invite extended members of her family.
The Red Arrows trailed their iconic red, white and blue colours as the flypast concluded.
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