Sullenberger said he did not hesitate when asked to serve as grand marshal because his family has watched the parade for decades.
"It's really an American institution, a celebration of American values," he said after the parade. "I think people see those in me, and I'm glad."
Parade-goer Hilda Roy held a hand-painted, fluorescent sign that read, "We (heart) you Sully!" She waved and screamed the name of the man who landed a stricken jetliner on New York's Hudson River and was thrilled when Sullenberger waved back.
"We come every year, but when we found out he was grand marshal, we were really excited," Roy, 48, said. "He's a real hero, not just a celebrity, and a real person, too."
The 121st Rose Parade had something for everyone.
Under signature sunny Southern California skies, onlookers gasped when the cannons of Honda's three-masted, sailing ship float boomed and shot sparklers and smoke rings toward the bleachers.
A float celebrating Mexico's bicentennial featured Mexico City's landmark Angel of Independence and an intricate flower Aztec calendar, as well as dancers costumed in traditional dresses.
A swarm of children wearing butterfly wings while cruising on inline skates also got a round of applause as they twirled in front of a float depicting the city of Shanghai.
The Kansai Honor Band from Japan rallied the crowd with "Thriller" dance moves and a color guard sporting teased hair and kimonos.
The parade came 20 hours after hundreds of thousands of people began staking out sidewalk space along the route for the annual New Year's Eve celebration. They lugged sleeping bags, lawn chairs and party favors then spent the night under the light of a rare blue moon - the second full moon in a month.
The new year dawned chilly, but brilliant sunshine brought the temperature into the 60s by the time the parade got under way.
It was mostly peaceful overnight along the route, except for some minor skirmishes. Police spokeswoman Janet Pope-Givens said 37 people had been arrested, mostly for disorderly conduct and public drunkenness.
Jessica Mota, 19, of Pasadena claimed prime parade-watching real estate for about 30 of her friends and relatives. She said she's been coming to see the parade since she was 10.
"My little cousins were bouncing around all night, and now they're passed out," she said, pointing to some huddled bodies beneath a sleeping bag.
Among the army of volunteers who help stage the parade, students from Pasadena City College and Marantha High School in Pasadena had possibly the dirtiest job.
Armed with shovels, overalls and rolling plastic trash cans, they cleaned up after horses in the procession.
Annie Sommers, a 16-year-old softball player, declared her white coveralls "hopelessly ugly" but accessorized with a plastic flower in her hair, rose earrings and a scarf.
Despite the work, Sommers said she was happy to participate in the world-famous parade.
"I'll try out for rose queen next year," she joked.
The selection of Sullenberger as grand marshal was a change from the crowd-pleasing show biz types who've led the parade in recent years. Last year, "Dancing With the Stars" favorite and 1970s sitcom star Cloris Leachman was grand marshal. The year before, it was celebu-chef Emerile Lagasse.
Sullenberger was chosen to embody the theme of the 2010 parade, "A Cut Above the Rest."
No one could argue that he fit the bill, parade-goer Jessica Osterman said.
"It's good that they're going back to the roots and picking an average person," said Osterman, 28. "Especially these days, with the recent terrorism attempt, we need a little patriotism. He's someone we can all agree on."
Over the decades, the grand marshal honor has gone to singers, astronauts, athletes, military men and politicians.
In the early years, parade organizers looked to the film industry in nearby Hollywood for big names to lead the procession. Silent film star and studio founder Mary Pickford lead the parade in 1933. Since then, only 10 women have held the title.
Chief Justice Earl Warren, entertainer Bob Hope and Richard Nixon (before he became president) each led the parade twice, while Shirley Temple did it three times in 1939, 1989 and 1999.
The parade has also had its share of war heroes. In 1952, seven Medal of Honor awardees shared the honor. World War I flying ace Eddie Rickenbacker led the parade in 1957.
More recently, Regis Philbin, William Shatner and Kermit the Frog rode in the lead car and tossed the coin before the Rose Bowl game.
For Terri Rubio, 58, the selection of Sullenberger was an inspiration.
"He's not out to sell himself as a celebrity," she said. "He's a common person who's sticking to his values. He's cool under fire and saved so many lives."
Tournament of Roses President Jeff Throop said he wasn't worried about finding another hero to be grand marshal next year.
"I think that's what American life is about," he said. "Those people rise to the top. They step up and do things."