South Sudan has become the world's newest nation, the climax of a process made possible by the 2005 peace deal that ended a long and bloody civil war.
Sudan's President Omar al-Bashir and UN Secretary General Ban Ki-moon are among international dignitaries attending celebrations in the capital, Juba.
Sudan earlier became the first state to officially recognise its new neighbour.
The south's independence follows decades of conflict with the north in which some 1.5 million people died.
Celebrations in Juba began at midnight (2100 GMT). A countdown clock in the city centre reached zero and the new national anthem was played on television.
South Sudan became the 193rd country recognised by the UN and the 54th UN member state in Africa.