"Today, every American can be proud that we have taken another great step toward keeping our military the finest in the world and toward fulfilling our nation's founding ideals," President Barack Obama said in a statement.
Obama, who signed a measure repealing the ban in December, said lifting the ban "would enhance our national security, increase our military readiness and bring us closer to the principles of equality and fairness that define us as Americans."
"As of today, patriotic Americans in uniform will no longer have to lie about who they are in order to serve the country they love," the president said. "As of today, our armed forces will no longer lose the extraordinary skills and combat experience of so many gay and lesbian service members."
He said the country "deeply values" the service of those discharged under the law.
Obama also praised those who backed repeal, saying, "Today's achievement is a tribute to all the patriots who fought and marched for change."
The U.S. Army sent a memo to soldiers around the globe.
"From this day forward, gay and lesbian soldiers may serve in our Army with the dignity and respect they deserve," the memo said.
"We expect all personnel to follow our values by implementing the repeal fully, fairly and in accordance with policy guidance," the memo obtained by The Washington Post said. "It is the duty of all personnel to treat each other with dignity and respect, while maintaining good order and discipline throughout our ranks. Doing so will help the U.S. Army remain the strength of the nation."
Gay-rights groups, including soldiers discharged under the rule, planned celebrations across the country.
The "important thing about this date is two or three years from now, when none of the negative predictions come true," U.S. Rep. Barney Frank, D-Mass., the most prominent gay U.S. politician, told Politico.
The "don't ask, don't tell" policy said the presence of openly gay service members "would create an unacceptable risk to the high standards of morale, good order and discipline, and unit cohesion that are the essence of military capability."
Tony Perkins, a Marine Corps veteran and president of the Family Research Council, a conservative Christian group that lobbied against ending the ban, said the policy shift risked using the military as a tool to "reshape social attitudes" and alleged that "using the military to advance a liberal social agenda will only do harm to the military's ability to fulfill its mission."
Gen. Carter Ham, commander of U.S. forces in Libya, told The Wall Street Journal he would "be astonished if this is a disruptive change."
"I think it will be pretty unremarkable across the military, and I think that is the way it should be," said Ham, who helped lead a study of the military's attitudes toward a change in the law.
About 39 percent of gays and lesbians in active service planned to come out to some people in the military, an online opinion sample of 533 members by the OutServe advocacy group indicated.
Nearly 17 percent said they'd reveal their sexuality to a few close friends in their units, 9 percent said they'd disclose it to most of the people in their units and 13.5 percent said they'd make it known to everyone.
About a third said they didn't intend to make their sexuality known to anyone who didn't already know about it, the sampling indicated.
"Don't ask, don't tell" started in 1993, after President Bill Clinton failed to end a ban on gays serving in the military in the face of stiff opposition from the Joint Chiefs of Staff and members of Congress.
Obama campaigned on a promise to seek an end to the policy. Mullen later argued it was time for Congress to lift the ban.
A congressional bill to repeal the measure was enacted in December, specifying the policy would remain in place until Obama, the defense secretary and the Joint Chiefs of Staff chairman certified that repeal would not harm military readiness, followed by a 60-day waiting period.
A July 6 ruling from a federal appeals court barred further enforcement of the ban.
Obama, Panetta and Mullen sent that certification to Congress July 22, setting Tuesday as the end of "don't ask, don't tell."