The New Zealand flag fluttered at half-mast as Christchurch mayor Bob Parker spoke of the great sense of loss that will "live with us forever".
Workplaces, schools and households all paused to pay their respects in their own ways.
With roadworks rife in the rebuilding city, many streets were lined today with rows of orange traffic cones filled with colourful flower bouquets.
In another touchingly inventive way of paying respects to the fallen and injured, and to reflect on the tumultuous last two years, hundreds of flowers were tossed into city waterways as part of the River of Flowers event.
While the main public service reflected on what has happened and paid tribute to the fallen, it also looked to the future.
The anniversary was a chance to look forward and also reflect on how far the city has come, Mr Key said.
He paid tribute to the "strength and resolve of Cantabrians" who have lost homes and businesses and suffered disruption and anxiety.
"In the face of it you've shown great heart and resilience. You have prevailed."
He said Christchurch will become one of the best and most liveable cities in the world.
Dean O'Connell, 43, took his 4-year old son Rohan to the intimate memorial.
"I thought it would be good for him. It's part of his life," said the volunteer firefighter, who spent February 23, 2011 working in Latimer Square.
Earthquakes often featured in games his son played with pals. "They'll be running around and there'll be quakes and rumbles. It's all part of their lives."
Karen Van Der Velden, 44, and her two daughters Xica, 15, and Keeley, 16, got there early to stand alongside their fellow Cantabrians who have been through so much over the last two years.
"We're just showing we care," said Mrs Van Der Velden.
Beckie Young, 38, said everyone in Christchurch had been affected by the quakes, and today was a chance to "stand together as a city".
After the service, many made the 100-metre pilgrimage to the empty concrete site of the CTV Building collapse, which was opened up for the day.
Crowds gathered in tearful, hugging groups to pay their respects to the 115 people who died in the six-storey building's collapse and subsequent fire.
The mourners - many from overseas who came to remember the dozens of victims from the King's Education School for English Language - left flowers, hand-written notes and private prayers.
"It'll never stop hurting," said one woman, before she turned away, sobbing into her partner's shoulder.