Berlin Mayor Klaus Wowereit told a ceremony on Bernauer Street: "The Wall is history but we must not forget it."
President Christian Wulff said Germany had been securely established as a reunified country.
The city observed a minute's silence at noon (10:00 GMT) in memory of those who died trying to escape.
“Many still bear the psychological scars”
Soldiers from the East began construction on the morning of 13 August 1961
- Initially a barbed wire fence, it became a wall which spread for nearly 160km (100 miles)
- More than 300 watchtowers were erected to spot escapees
- Minefields were laid in some sectors
But he says the accepted view now is that it was to keep East German potential migrants in.
'Saddest day'
Germany's leaders attended the Berlin Wall commemoration
Addressing the ceremony on Bernauer, a street famously divided by the Wall and now site of a memorial, Mayor Wowereit said the capital was remembering the "saddest day in its recent history".
"It is our common responsibility to keep alive the memories and pass them on to the next generation, to maintain freedom and democracy and to do everything so that such injustices may never happen again," he said.
Earlier, Mr Wulff told Die Welt newspaper that the modern Germany could take pride in "East Germans' irrepressible desire for freedom and West Germans' solidarity with them".
Chancellor Angela Merkel, who also attended the event, was herself raised in the East.
The number of people who died trying to cross the Wall is disputed - at least 136 are known to have been killed but victims' groups say the true number is more than 700.
Find Out More
- BBC History explains why the Berlin Wall went up, and why it came down - in excerpts from BBC television documentaries
The first victim was thought to be Guenter Liftin on 24 August 1961 and the last Chris Gueffroy on 6 February 1989.
A list of names of the victims was read out overnight.
Brigitta Heinrich, a schoolteacher by profession, grew up in Klein-Glienicke, which was unusual in that it was an East German enclave on the territory of West Berlin.
“I cannot name a single West German with whom I socialise now - really, I can't”
-Brigitta Heinrich Fomer East German teacher
Speaking to Russian news agency Ria-Novosti, she said one of her own pupils had escaped across the Wall in the early days, using a ladder.
The schoolboy's parents were forced to move out of Klein-Glienicke as a result, and the mother was sacked from her job in a company, she said.
Recalling the hardships and broken illusions of the communist state, Ms Heinrich, who still lives in the East, also talked of the difficulty of readjusting to a unified country.
She said she had made friends with other Europeans such as Italians and Finns since the fall of the Wall but some West Germans, especially in regions further away from Berlin, seemed indifferent to people from the former East, as if an invisible barrier remained.
"I cannot name a single West German with whom I socialise now - really, I can't," she said.
Few parts of the Wall remain, though city authorities have laid down an 8km row of cobblestones to mark its path.
Tourists often struggle to find original sections.
BBC News Europe
Top left: Alex Krieger, Lauren Cheney, Hope Solo, Abby Wambach, Carli Lloyd, Rachel Buehler. 
