About 600 people greeted the Queen at Liverpool One
Liverpool can now count Britain's head of state among those impressed by the redevelopment of the city.
Speaking to officials during a tour of the new arena the Queen, accompanied by the Duke of Edinburgh, spoke of how pleased she was to be in the city.
Arena chief executive Bob Prattey said: "She said there are lots of impressive developments going on."
After officially opening the new arena, the royal couple moved on to the £1bn Liverpool One retail development.
The Queen met performers, artists and watched a dance routine by a group of city schoolchildren during her tour of the arena.
During the visit the monarch, who was dressed in a pale pink outfit, pink hat, black gloves and black shoes, also spoke to 71-year-old Lily Schofield, of Stoneycroft.
Mrs Schofield said: "She just said to me it was a beautiful building and asked if anything had been going on and what shows had been here.
"I told her what had been happening and then I said to her she's the icing on the cake and she smiled. I am a real royalist."
The royal couple later moved on to Liverpool One, where they were greeted by cheering crowds of construction workers from the 46-acre site.
Prince Philip climbed to the roof of a 13-storey block of apartments, where he led the topping-out ceremony.
The Queen then met a group of people who found jobs at the £1bn retail development through the council-run Shop For Jobs scheme.
One of the workers, Janet Corry, said: "I told her I work on the accessories counter at Debenhams and she should come to see me next time she is shopping for a new hat."
About 600 people cheered as the Queen unveiled a plaque to mark the royal visit.
Rod Holmes, Grosvenor's project director at Liverpool One, said: "There was a great burst of activity around the wharf area of Liverpool about 300 years ago which was crucial to the growth of the 'second city of the Empire'.
"The investment and development around this very same place has kick-started a remarkable rejuvenation, creating a new sense of pride and optimism in Liverpool, as well as jobs, opportunities and a better environment.
"The Queen's visit is recognition of this wonderful change."