With spectators banned, an actress dressed as an ancient Greek high priestess lit the flame using the rays of the sun reflected off a concave mirror, launching a week-long torch relay in Greece before the flame is handed to Tokyo organisers on March 19.
"Today marks the beginning of the journey of the Olympic flame to Japan," said International Olympic Committee (IOC) president Thomas Bach.
"When the flame returns to Tokyo after 56 years, hope will light the way across the entire country," he said.
Japan last hosted the summer Olympics -- also in Tokyo -- in 1964.
Now it seeks to use the 2020 Olympics to show the world it has regained its creative flair and innovative energy, but also as a means to highlight reconstruction following the 2011 earthquake and tsunami in Fukushima.
"Japan will demonstrate its groundbreaking innovation and boundless creative energy with regards to sustainability, technology and human-centred growth," Bach said.
"The Olympic Games... will again be a symbol of hope and confidence for all Japanese people."
But with the coronavirus causing devastation in world sport, doubts are increasingly being raised over whether the Olympics can be held as scheduled from July 24 to August 9.
Organisers have insisted the Games will go ahead as planned and the IOC has said there has not yet been any talk of cancellation or postponement.
The IOC has said it will coordinate closely with the World Health Organization, which has now officially classified the outbreak as a pandemic.
The torch relay in Greece is scheduled to pass through 37 cities and 15 archaeological sites covering 3,500 kilometres (2,175 miles) and 842 nautical miles (1,559 km) and will be carried by 600 runners.
Once in Japan, the relay will start from Fukushima and travel along routes eventually leading to the capital.
Closed to the public
The hydrogen that powers the Olympic flame will be produced in the town of Namia in Fukushima, one of the worst affected areas, said Toshiaki Endo, acting president of the Tokyo 2020 organising committee.
And the torch has been partially produced from recycled aluminium originally used to build temporary housing units in the aftermath of the quake, he said.
Greek Olympic shooting champion Anna Korakaki was the initial torch bearer, the first time a woman has been chosen for the role.
She was followed by Mizuki Noguchi, gold medallist in the women's marathon at the 2004 Athens Olympics.
Hollywood actor Gerard Butler will be among the runners once the torch relay reaches Sparta. Butler starred as the ancient Spartan King Leonidas in the 2007 epic '300'.
The ceremony was held without spectators after dozens of people tested positive for COVID-19 in the broader western Peloponnese. Up to 12,000 had been expected to make their way to Olympia, where the ancient Games were held.
Only 100 accredited guests from the International Olympic Committee and the Tokyo 2020 Organising Committee, compared to 700 originally, were allowed to attend Thursday's ceremony.
The dress rehearsal on Wednesday was also closed to the public and dinners and galas arranged for the torch lighting have been scrapped.
The only precedent is in 1984 when the Greek leg of the torch relay was abandoned in a protest by Greek organisers against what they saw as the commercialisation of the Los Angeles Olympics.