Turnout reached 700,000, police told AFP, in the city often described as Germany's gay capital, having earned a reputation for its acceptance of the lesbian, gay, bisexual and transgender community.
Organizers said the event was the largest of its kind in Europe.
Wearing sequined costumes, blue wigs and giant pink glasses, participants used their imagination to inject a sense of fun into the event.
Aside from the large numbers, the parade was notable for being joined for the first time by the local Cologne football club, a first division team.
Homosexuality in football remains a taboo that authorities in Germany have been trying to break.