Forty-eight hours of celebrations are taking place to mark nine new states joining a European border-free zone.
Nine mostly ex-communist states have joined the Schengen zone
The Schengen agreement, which allows passport-free travel across the area, now embraces 24 nations.
Some 2,000 people celebrated in the town of Frankfurt on Oder at Germany's border with Poland, amid fireworks and the EU anthem, Beethoven's Ode to Joy.
The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined the zone.
Speaking in Zittau, close to where Germany, Poland and the Czech Republic meet, German Chancellor Angela Merkel said it was a "truly historic moment".
Mrs Merkel was joined by Polish Prime Minister Donald Tusk, his Czech counterpart Mirek Topolanek and European Commission President Jose Manuel Barroso.
Crime wave fears
On Thursday a checkpoint between Austria and Slovakia was dismantled in one of several events marking the enlargement from the Baltic Sea to the Adriatic.
Slovak Prime Minister Robert Fico and Austrian Chancellor Alfred Gusenbauer sawed through a barrier at the Berg border crossing.
Mr Fico said: "From midnight tonight you can travel 4,000km (2,485 miles) from Tallinn in Estonia to Lisbon in Portugal without any border controls."
Mr Gusenbauer welcomed the extension of the Schengen zone, rejecting fears that it might create a crime wave in Austria.
The European Commission says that one billion euros (£720m) has been spent on beefing up security on the new EU frontiers, including the establishing of missions along the Polish and Slovak borders.
Initially the lifting of internal controls involves just land and sea borders, but that will be extended to airports at the end of March 2008.
Although the enlargement allows passport-free transit throughout the area, travellers can be asked to carry documents by any of the countries concerned.
For non-EU nationals, a Schengen visa allows travel across all the participating countries.
Thirteen existing EU states have already been part of the Schengen accord as well as two non-EU countries, Norway and Iceland.
The UK and Ireland are not involved in the zone - which embraces 400m people - but they have signed up to agreements on security.
A significant element of the Schengen agreement is the Schengen Information Service (SIS) which features an enormous database in the French city of Strasbourg.
The SIS database enables police in any Schengen state to find out whether a suspect has been involved in any kind of crime across the EU.