The show, celebrating "beauty, the sea and vanity," according to organizers, provided the grand opening for one of the world's most celebrated carnivals which will run this year until February 28th.
Some of the performers, sporting blue butterfly wings, appeared to be suspended in the air as gondoliers carried torches below.
IN PICTURES: Venice Carnival opens in spectacular style
"It's fabulous," enthused Monica, a young American from Tennessee, who came to the event complete with mask and cape.
The second part of the festival on the water will take place on Sunday with a flotilla of unique carnival boats.
The Venice carnival is thought to have started in 1162, when Venetians spontaneously gathered to celebrate a military victory in Saint Mark's Square. During the Renaissance it became an official festival, the masks allowing revellers to forget everyday worries and the city's rigidly hierarchical class system, and indulge for the carnival period.
Abandoned for decades after it was outlawed under Austrian rule, it was resurrected in 1980 as part of a government effort to promote the region's culture and history.
It is now one of the most famous carnival celebrations in the world, with around 3 million visitors flocking the canal-covered city each spring to watch or join in the festivities.
The ornately decorated masks have become synonymous with the city, though originally the masks were simply made, worn simply for practicality. In centuries gone by, maskmakers were esteemed members of society, with their own guild and governed by separate laws, while laws also regulated the periods of the year in which people were allowed to wear masks.
Now, the competition for the most beautiful mask is one of Carnival's central events, judged by a panel of international costume and design experts.