The marriage brings Monaco a new princess after nearly 30 years.
Charlene Wittstock of South Africa succeeds Grace Kelly, the Hollywood beauty who wed Albert's late father, Prince Rainier III, in 1956. The couple had three children before Kelly died in a car crash in 1982.
Adoring crowds gathered outside the palace as the couple waved from a window.
Inside, the couple exchanged vows in their civil ceremony, answering "Oui" when asked if they took each other in marriage.
Dressed in a dusty blue jacket and matching palazzo pants made by Chanel, her blond hair pulled back, Wittstock seemed to be channeling a bit of Princess Grace's legendary elegance.
Prince Albert is 53, while Wittstock is 33.
The couple will hold a second, religious ceremony on Saturday. The lavish event will include fireworks and a star-studded guest list.
Long regarded as one of Europe's most eligible bachelors and reputed for his string of romances with some of the world's most beautiful women, Albert long eschewed marriage. His reticence to settle down was known to have exasperated his father and made many despair of him ever tying the knot.
Albert's prolonged bachelorhood even sparked persistent rumors he was gay, though those were largely quashed after he acknowledged having fathered two children out of wedlock - a now-teenage daughter with a California woman and a little boy with a stewardess of Togolese origin.
Rumors that a third illegitimate child may have recently surfaced have overshadowed the wedding.
The Associated Press contributed to this report.