Dignitaries and longtime residents gathered under grey skies at the memorial to Katrina's victims in a New Orleans cemetery where dozens who perished in the storm, but were never identified or claimed, are interred.
"We do everything to keep the memory of these people alive," said Orrin Duncan.
A category three hurricane when it made landfall in Louisiana on August 29, 2005, Katrina inflicted staggering destruction.
The storm killed nearly 1400 people across five states and racked up an estimated $US200 billion ($A306 billion) in damage, flattening homes on the coast and sending ruinous flooding into low-lying neighbourhoods.
Two decades later, it remains the costliest US hurricane on record, according to the National Oceanic and Atmospheric Administration.
The failure of New Orleans' federal levee system inundated about 80 per cent of the city in floodwaters that took weeks to drain.
Thousands of people clung to rooftops to survive or waited for evacuation in the sweltering, under-provisioned Superdome football stadium.
At the cemetery memorial, revered jazz clarinetist Michael White played When the Saints Go Marching In as a procession carried several wreaths to lay beside the mausoleums of the storm victims.
Mayor LaToya Cantrell recalled the city's sacrifices and projected optimism for its future.
"New Orleans is still here; New Orleans still stands," Cantrell said.
"New Orleans came back better and stronger than ever before."
Former Vice President Al Gore was among attendees at an event in the city's Lower Ninth Ward, a predominantly black community where a levee breach led to devastating flooding that was exacerbated by a delayed government response.
Thousands joined a brass band parade known as a second line.
The beloved New Orleans tradition has its roots in African American jazz funerals, in which grieving family members march with the deceased alongside a band and trailed by a second line of dancing friends and bystanders.
A parade has been staged on every Katrina anniversary since local artists organised it in 2006 to help neighbours heal and unite the community.
In Mississippi, where hundreds perished as Katrina's storm surge demolished homes overlooking the gulf, residents and officials gathered to mark the anniversary in Gulfport.
Haley Barbour, Mississippi's governor when the hurricane struck, recalled the "utter obliteration" he witnessed from a helicopter after the storm passed.
"It looked like the hand of God had wiped away the coast," Barbour said.
The population of New Orleans, nearly half a million before Katrina, is now 384,000 after displaced residents scattered across the nation.
In the aftermath, the levee system was rebuilt, public schools were privatised, most public housing projects were demolished and a hospital was shuttered.
The storm had a disproportionate impact on the city's black residents.
While New Orleans remains a majority black city, tens of thousands of black residents were unable to return after Katrina.
A botched and racially biased federal loan program for home rebuilding, coupled with a shortage of affordable housing, has made it harder for former residents to come back.
New Orleans resident Gary Wainwright said he never misses the cemetery memorial service on Katrina's anniversary.
On Friday, he wore a frayed red necktie, covered with the phrase: "I love you."
He salvaged it from his battered home in the storm's aftermath.
"It's a little bit tattered, like the city," Wainwright said.
"But it's still beautiful."
