Prince Charles waved a Japanese paper fan and danced the Awa Odori for about three minutes with Crown Prince Naruhito of Japan in Hyde Park, central London.
The princes are co-patrons of Japan 2001 Matsuri, a traditional Japanese carnival of arts, food, sport and lifestyle.
As he danced next to the official dancers, all wearing loose white silk gowns and some in straw hats, the Prince of Wales was urged to raise his arms higher above his head by Shinichi Nishimiya, the chief executive of the festival.
The Awa dance is a tradition of southern Japan. According to tradition, it is those not joining in who are the most foolish.
The chief of the troupe, 58-year-old Sturse Sashiko, said she had been delighted to see the princes join in.
Taiko drumming
Of Charles she said: "He's a very good dancer."
Only a few weeks ago while on an official trip to Canada, the Prince joined a traditional hunting dance with a brightly dressed Cree native Indian in Regina, Saskatchewan province.
The Matsuri festival, part of Japan 2001, saw displays of traditional Japanese arts such as origami and martial arts in the centre of London.
Young people from Exeter, Devon, put on a display of taiko drumming, while disabled and able-bodied dancers from a group called Momiji also performed for the royal party.
The two princes also watched a display of Yabusame - horseback archery - in which riders have to bolt down a 300-metre track shooting arrows at three targets as they pass.
The Crown Prince, on a seven-day visit to Britain, is to attend the Japan 2001 Philharmonia Concert, with the Duke and Duchess of Gloucester, at the Royal Festival Hall on Sunday night.
On Monday he will visit the Chelsea Flower Show with Princess Alexandra.