An estimated million excited festival-goers lined the streets for parades, floats and music at what was described by organisers as the most "relaxed" in years.
Scotland Yard earlier defended the heavy police presence which they say has helped keep trouble to a minimum.
The carnival's organisers said they were happy with the way the carnival progressed on Monday.
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"It feels like everyone is pulling together to get behind the carnival and it really seems everyone has come with the right attitude and it feels more relaxed than it has done in previous years," said Steph Harwood, a spokeswoman for the event's organisers.
Bad weather and a heavy police presence was thought to be behind Sunday's lower than expected crime figures, which included offences involving drugs, robbery, theft and being drunk and disorderly.
Scotland Yard said the venture so far has been a success, though any likely trouble would take place later into the evening.
The cost of policing Europe's biggest street party shot to a record £4m this year following the violence which marred last year's event.
Ninety-three members of the public were treated for minor injuries.
Some revellers felt that the massive police presence should be put to one side to focus on the carnival itself.
One woman, who has been coming to the carnival since she was five and was now bringing her teenage daughter, said it was the tradition and atmosphere that brought millions from far and wide.
Many officers also put their jobs aside for a while to join in with the festivities, dancing with the floats and decorating their uniforms.
Scotland Yard's Deputy Assistant Commissioner, Andy Trotter, said the huge police presence was "justified in the sense that we all need to work together to make sure that no one gets hurt in today's event through not having sufficient resources on duty".
A total of 10,000 police officers and 80 extra CCTV cameras have been put on the circular route for the two-day event, which was expected to attract two million people.
Twenty-seven people were arrested on the first day of the carnival and eight police offers needed treatment for minor injuries.
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BBC London Live: Carnival 2001 |
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