Chinese President Hu Jintao has opened the world's highest railway, describing it as a "magnificent feat".
The Qinghai-Tibet line boasts high-tech engineering to stabilise tracks over permafrost and sealed cabins to protect passengers from the high altitude.
China says the 1,140km (710-mile) line will bring major opportunities to a poor region.
But critics fear it will be used by China to assert its control over a contested border region.
They also say the railway line threatens not only the delicate Himalayan environment, but also the ancient Tibetan culture.
Mr Hu cut a red ribbon before the first train left Golmud in China's Qinghai province, carrying 900 passengers to the Tibetan capital, Lhasa.
"This is a magnificent feat by the Chinese people, and also a miracle in world railway history," Mr Hu said.
He said it showed China's people were "ambitious, self-confident and capable of standing among the world's advanced nations".
There have been protests against the railway, such as this in India
Musicians in traditional Tibetan and Chinese dress banged drums and cymbals as thousands of workers who helped to build the line looked on.
Minutes later, state TV showed another train departing Lhasa for Golmud.
On Friday, three foreign activists were briefly detained at Beijing's central railway station on Friday after unfurling a banner that read: "China's Tibet Railway: Designed to Destroy."
At its highest point, the railway will reach 5,072m (16,640ft) - beating by 225m a route through the Peruvian Andes that was previously the world's highest railway, the China Daily newspaper reports.
In parts, the train line has been built on bridges elevated above the most unstable permafrost.
Elsewhere, cooling pipes have been sunk into the ground to ensure it remains frozen to stabilise the tracks.
Connects Lhasa to existing China rail network
New 1,140km stretch cost $4.2bn
World's highest railway, reaching 5,072m
Oxygen to be pumped into each carriage
Restaurant car's rice cooked in pressure cookers, to mitigate effects of high altitude
Beijing to Lhasa to take 48 hours, cost $50-$160 one way
The train carriages have windows with ultra-violet filters to keep out the sun's glare, as well as carefully regulated oxygen levels with spare supplies to combat the thin air.
Zhu Zhensheng of the Chinese railway ministry called the new line a "major achievement" that will "hugely boost local development and benefit the local people".
But exiled Tibetan Lhadon Tethong said the railway was "engineered to destroy the very fabric of Tibetan identity".
"China plans to use the railway to transport Chinese migrants directly into the heart of Tibet in order to overwhelm the Tibetan population and tighten its stranglehold over our people," he said on a Free Tibet Campaign statement.
The Dalai Lama, Tibet's spiritual leader in exile since 1959, was more circumspect.
"The railway line itself is not a cause of concern for the Tibetan people," his spokesman, Thupten Samphel, said. "How it will be used is the main concern."