Venice has been hit by the biggest flood in more than 20 years, with waters rising 1.56m (5ft) above normal.
Many of Venice's streets, including the famous St Mark's Square, were submerged, before the high waters began to retreat.
The lagoon city in the Adriatic suffers some level of flooding for about 200 days every year.
The authorities are planning to complete the building of an underwater dam to protect the city by 2011.
Driven by strong winds, the sea level rose to 1.56m above normal on Monday, submerging nearly all of the city, including St Mark's Square, officials said.
It was the highest "acqua alta", or high water, since it reached 1.58m in 1986.
Venice battles flood waters
A system of elevated wooden walkways was set up, while sirens and loudspeaker announcements reinforced the flood alert for the city's residents and tourists.
Mayor Massimo Cacciari urged residents to stay at home, and warned tourists thinking of coming to Venice to "think again".
"It's an exceptional 'acqua alta', and unless you absolutely have to, don't go out," the mayor said in a statement.
BBC News website reader Hannah McShane said she could not leave her second-floor flat.
"The residents who live on the ground floor are pumping out the water from their houses with buckets. The water is highly polluted and is beginning to smell, as well as leaving behind rubbish of all kinds on the street as the water levels decrease," she said.
The situation was complicated by a transport strike affecting the city's "vaporetto" water buses.
Earlier, Venice's Centro Maree, which monitors water levels, warned that the flooding could reach as high as 1.66m above sea level.
However, the waters began subside after a sudden change in the wind's direction.
The last time the waters passed 1.6m was in 1979, when they reached 1.66m.
In 1966, some 5,000 people in Venice were left homeless after an even higher flood - 1.94m - hit the city.
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