The Bolton comic turned on the famous lights at 21:30 BST on Friday after a concert by X Factor winners Little Mix.
The event marks the start of a three-day programme of entertainment on the Tower Festival Headland, including a Thriller Live show and a concert headlined by Rebecca Ferguson.
The comedian said turning on the lights was a "massive big deal to me".
Kay said Blackpool was a huge part of his life.
"I did my first live stand up show there. We filmed Phoenix Nights there. We filmed Max and Paddy there," he said.
Little Mix headlined the Illuminations Switch-On concert. There were also performances from Texas, Pixie Lott, Union J, George Ezra and Matt Cardle.
The promenade lights will shine nightly until 9 November.
Stretching for six miles, the Blackpool Illuminations attracted 3.5m visitors to the town last year.
Blackpool Illuminations are alight again - after comedian Peter Kay hosted the big switch-on.