Tony Blair has called the expansion of the EU a "tremendous opportunity" for Britain, during celebrations in Dublin to welcome the 10 new members.
There are 10 new flags flying
Mr Blair said Europe was reunited again after the troubles of the 20th century.
Irish Prime Minister Bertie Ahern told the leaders from all 25 states it was "a day of hope and opportunity".
A ceremony was held in the Irish capital's Phoenix Park, where 2,000 demonstrators clashed with police later on Saturday. There were 25 arrests.
Water cannons were used to disperse the crowds, which were thought to be anti-capitalist protesters trying to enter the park while the leaders attended a banquet.
Earlier, Mr Blair said: "It's certainly a great day for Europe and a great opportunity for Britain.
"The countries coming into Europe share our view of a Europe of independent nation states working together for the common good of all."
He accepted that some people had fears over the effects of expansion.
"When the European Union is enlarged there has been a time of uncertainty, but in the end it has been to the benefit of the existing and the new members of the European Union.
"I think our duty is to try and point out to people that these concerns can be exaggerated and we can overcome them."
The EU accession states are Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.
Blazing firework displays took place in capitals across Europe at midnight on Friday to mark the moment.
Ireland currently holds the presidency of the EU, and Mr Ahern said: "To the people of Europe who are joining us today, I extend the hand of friendship ... a hundred, thousand welcomes".
The country mounted its biggest security operation since Pope John Paul II visited in 1979.
More than 5,000 officers are on duty for the weekend and 1,000 donned riot gear at four different parts of the city to police anti-capitalist protests.
As well as toasting the EU's population rising to nearly half a billion, the leaders of the old EU welcomed heads of governments of the 10 new members.
The EU constitution was not officially on the agenda, but it was the first time Mr Blair encountered European counterparts such as French President Jacques Chirac since his decision to hold a referendum on the issue.
This was believed to have angered some of his European counterparts, but Mr Blair repeated his belief that holding a referendum was "the right thing to do".
Blair wants to stay in the centre of EU
"I hope very much we keep our place at the centre of Europe. I think it is vital for our country.
"But in the end that is a decision that people have got to take."
Mr Blair and Mr Ahern are to hold talks on Northern Ireland on Sunday, and the constitution may also be discussed.
Meanwhile the President of the European Union, Ireland's Pat Cox, criticised what he called Britain's "prejudice" against enlargement.
He said he had been sickened by some of the media coverage he had seen in the UK about the 10 new members joining.