Almost 200 floats made their way down Oxford Street on Saturday night, celebrating a multitude of cultures, religious beliefs, organisations and causes, and embracing the theme of "Fearless".

Machines spat out flames and showered confetti over the parade.

Wearing a shimmering gold dress, pop singer Minogue made a surprise appearance during the event alongside Courtney Act and a group of drag queens dressed as the singer.

Parade-goer Saskia said the night was like "gay Christmas".

Fireworks lit up the air as pre-parade celebrations kicked off with Dykes on Bikes Sydney, Boys on Bikes and Melbourne Motorcycles Tourers taking pride of place.

Bearded drag queens, shoulder pads in the shape of the Opera House and rainbow flags were also seen among the throng.

The First Nations float led the parade followed by the 78ers, a contingent of those who were at the first Mardi Gras in 1978.

The night also included protest floats railing against Prime Minister Scott Morrison and Australia's detention policies.

Politicians including Premier Gladys Berejiklian and federal MP for Wentworth Kerryn Phelps were among the 500,000 at the parade.

"Mardi Gras brings everybody together and it shows that we all care about each other and no one should feel bad because of their own background or circumstances," Ms Berejiklian told AAP on Saturday night.

Labor deputy opposition leader Tanya Plibersek said Mardi Gras showed that Sydney knows how to throw a great party.

Australian Associated Press