The magnitude 7.3 earthquake, which struck at 5:46 a.m. on Jan 17, 1995, killed 6,434 people in Hyogo Prefecture and neighboring areas.
A ceremony was held in Higashi Yuenchi Park in Kobe where 7,000 bamboo lanterns were lit and placed in the figures 1.17 (the date of the quake) and the kanji character hikari (light) in memory of the victims.
Meanwhile, in a park in Itami, 6,434 candles were lit to honor the dead.
Crown Prince Fumihito and Crown Princess Kiko attended a memorial ceremony held by the Hyogo prefectural government on Friday morning.
The quake buried residents in flattened buildings and uprooted highway overpasses and train tracks, while fires raged through collapsed timber houses and acrid smoke darkened the sky.