Queen Elizabeth II made her grandson the 1000th knight to join the order and formally presented him with the regalia, which includes a blue garter, sash and star brooch.
After the ceremony, the knights wore their traditional ostrich feather hats and velvet robes as they walked to St. George's chapel in the castle grounds for a service. William's girlfriend Kate Middleton, dressed in a simpler black suit and hat, watched the procession with his brother Prince Harry.
The Order of the Garter was established in 1348 and the Queen can give the honour to anyone she chooses without advice from government ministers. It is meant to honour those who have held public office, who have contributed to national life or who have served the Queen personally.
Two former prime ministers, Margaret Thatcher and John Major, are members of the order.
The garter itself is a dark blue velvet strap with the words "Honi soit qui mal y pense, old French for "shame upon him who thinks evil upon it."