At least 136 people are thought to have been killed at the wall while trying to escape.
Ms Merkel - who grew up in East Germany - presided over Monday's celebrations.
She led a procession of leaders through the Brandenburg Gate - the symbol of German reunification in 1990.
Russian President Dmitry Medvedev, ex-Soviet leader Mikhail Gorbachev, former Polish President Lech Walesa and ex-Hungarian Prime Minister Miklos Nemeth were also among leaders, past and present, who attended.
Ms Merkel said the anniversary was a reminder to "take on the challenges of our time" - from poverty to climate change - and "the defence of human rights all over the world".
Mrs Clinton said the event was "a call to action".
HOW THE WALL FELL
13 Aug 1961: East Germany erects the Berlin Wall
Aug-Sep 1989: Tens of thousands of East Germans seek asylum abroad as communist control over Eastern Europe relaxes
7 Oct: Soviet leader Mikhail Gorbachev indirectly calls for reform on a visit to East Berlin
18 Oct 1989: Egon Krenz replaces Erich Honecker as East Germany's leader after anti-government protests
4 Nov: Mass protests by East Germans culminate in a million-strong rally in Berlin
9 Nov: The Wall is breached after the East German government moves to lift curbs on travel over the border to West Germany
"There are still millions across our world who are separated, maybe not by walls... but people who are separated from their loved ones, who are kept behind, who are locked behind bars," she continued.
She introduced a special video address from Washington by US President Barack Obama, who said the fall of the wall had been a clear rebuke of tyranny.
Mr Brown said: "Let me thank you, the people of Berlin, for showing that in a troubled world with an Africa in poverty, and a Darfur in agony, a Zimbabwe in tears and a Burma in chains, individuals even when in pain need not suffer forever without hope."
Tens of thousands of people braved rainy downpours to mark the events of two decades ago that transformed the political face of Europe.
Mr Sarkozy said the anniversary was "a call to fight oppression and to tear down all the walls that still separate the world, that divide cities, regions and nations".
Mr Medvedev said confrontation was in the past and now was the time to "build a different, new, better world".
After the leaders spoke, a chain of 1,000 giant foam dominoes - painted with messages of freedom by young people - was toppled along where the wall once stood.
The symbolic act was to reflect how the then Communist governments of Eastern Europe fell one after another.
The festivities were capped with fireworks and a concert featuring music from Berlin's State Opera and the American rock band Bon Jovi.
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