Afterwards, the Queen, wearing black coat adorned with a bunch of poppies, laid the first wreath followed by other members of the Royal Family.
Among them was Prince Harry, carrying out the duty for the first time. He was representing his father, the Prince of Wales, who is on an official visit to Canada.
Politicians, high commissioners from the Commonwealth and defence chiefs from all three armed forces also came forward to pay their tributes.
Finally, 7,500 ex-service personnel and 1,600 civilians marched past the Cenotaph. Chelsea Pensioners, in their traditional red jackets, and Gurkhas, wearing combat green, were among those lining the route.
Earlier about 2,000 British servicemen and women gathered on a dusty, windblown patch of open ground at the camp in Afghanistan to join in prayer, lay wreaths and remember fellow soldiers killed serving their country.
Key moments from the Camp Bastion Remembrance ceremony
One padre spoke of the dangers of glamorising war and another urged leaders of nations to shape a better world through "wisdom, humility and a common love for peace".
Another service was attended by hundreds of British and coalition forces in Lashkar Gah, also in Helmand.
There Padre Mark Christian told the troops: "Remembrance for me is picking up the gauntlet, it is steeling ourselves for the fight that lies ahead of us for if we do not do that their lives have been given in vain."
Chief of the Defence Staff Sir Jock Stirrup told the BBC's Andrew Marr Show there had been only one year since World War II in which a British serviceman did not die on operations somewhere in the world.
"But of course with the conflicts in which we've been engaged in recent years, that's come into much sharper focus," he said, "And so it's right that we should remember particularly this year, which has been a very difficult, very painful year for us.
By Angus Crawford, BBC News
There was a sea of berets in every possible colour. Among them the occasional slanted hat of the Gurkhas and even some Arab headdresses. This was the march past of the veterans.
They had waited patiently in the cold for more than an hour, watching as the Royal Family laid their wreaths. Then, after a blessing from the Bishop of London, Whitehall was theirs.
Flanked by today's service personnel, the tide of more than 8,000 moved slowly past the Cenotaph.
Most were marching, some though were pushed in wheelchairs - one man rose from his and insisted on walking the last few paces himself clutching a wreath in the shape of an anchor.
Some wore bowler hats, others, armbands with the insignia of the Home Guard.
In their midst was a child. A young boy wearing a suit and medals, swinging his arms as hard as he could, trying to keep up.
"But I think it is also important to bear in mind the sacrifices of all those who've gone before - not least in this year that's seen the passing of the World War I generation."
In Cyprus, a memorial is due to be unveiled to commemorate 371 British servicemen killed by members of a Greek Cypriot Eoka-B terror group fighting for independence from 1955 to 1959.
About 400 relatives and veterans of that campaign will attend the ceremony, which will be conducted by the Bishop of Cyprus and the Gulf in the presence of the British High Commissioner.
The Muslim Council of Britain has published a Remembrance Day report highlighting the contribution of Muslims to the country's armed force and urging that their sacrifices should be recalled in the day's ceremonies.
It insists that although many Muslims disagreed with the government's decision to send soldiers to fight in Afghanistan and Iraq, they nevertheless supported the troops.
The Royal British Legion said it expected at least 90% of people in Britain to observe some kind of service.
Stuart Gendall, from the legion, said the "terrible images brought into our lounges from Iraq and Afghanistan" and the losses there had given people a better understanding of the sacrifices being made.
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