The flame, which will burn throughout the Summer Games in London, was lit at in an elaborate ceremony in Olympia, Greece, this morning.
The Associated Press described how, amid the ruins of the 2,600-year-old Temple of Hera, a Greek actress dressed as a "high priestess" invoked the Ancient Greek sun god Apollo before using a mirror to focus the sun's rays and set the torch burning.
The method is highly symbolic, the BBC explained: the Olympic flame represents purity because it comes directly from the sun.
International Olympic Committee president Jacques Rogge described it as "a beacon for the Olympic values of friendship, excellence and respect ... a symbol of fellowship and peace."
According to the BBC's correspondent, the flame went out briefly and had to be relit, but otherwise the ceremony went smoothly.
A torch lit from the flame is now on the first leg of its two-week relay around Greece.
Despite the country's economic troubles – as GlobalPost reported in April, the Greek Athletics Federation was forced to suspend domestic trackand field events due to funding problems, while its Olympic Committee relied on sponsors to pay for today's ceremony – organizers said none of the spectacle would be spared.
"We won't scale down on what we are going to do on Greek soil about the torch relay," the head of the Hellenic Olympic Committee, Spyros Capralos, told the AP. "It's going all around the country ... to remind all our fellow countrymen of the importance of the torch, the importance of the Olympic Games, that everything started from here."
Some 490 torch bearers will carry the flame the length and breadth of Greece, before it is transferred by airplane to the United Kingdom on May 18.
It will then go on a 70-day journey around the UK, borne by 8,000 volunteers. It is due to reach the Olympic Stadium in London on July 27, ready for the opening ceremony.