In one of the most emotional speeches in the service, Shields, who first met Jackson when she was 11 years old, said the singer was "was one of a kind."
Shields recalled how Jackson tried but failed to teach her his signature dance move, the moonwalk, and how she teased him with the line, "What's up with the glove?"
"People called him the king, but he reminded me more of the little prince," she said.
Jackson had a wonderful laugh and "seeing him smile made you feel like everything was going to be all right," said the actress.
Paying tribute to the lyrics in the song "Smile," Shields said, "Today although our hearts are aching, we need to look up where he is undoubtedly perched in a crescent moon and we need to smile."
During a performance of "Will You Be There" by Academy Award winner Jennifer Hudson, Katherine Jackson could be seen crying. Jackson's daughter Paris was seen in her aunt Latoya's arms.
Singer Usher's rendition of Jackson's "Gone Too Soon" drove many to tears and others to cheer "long live the king" and "we miss you Michael!"
Usher, who also broke down in tears at the end of the song, walked around the arena and placed his hand on Jackson's coffin as he sang. Again, daughter Paris was visibly emotional.
Motown singer and songwriter Smokey Robinson said that he felt "blessed" to have known Jackson.
"I never thought I would be there…that's my little brother over there," said Robinson. "You just don't think that you'll live to see him gone. But he will never really be gone. He is going to live forever and ever and ever and ever."
"He has made an enormous impact on all of our lives…all over the world," said Robinson.
Pop star Mariah Carey was the first to sing at the memorial, performing the Jackson Five's "I'll Be There."
Longtime Jackson pal and fellow musician Stevie Wonder said that he wished "this was a moment he didn't live to see."
"We can't help but love you forever, Michael," said Wonder before playing the piano and singing "I Never Dreamed You'd Leave in Summer."
Among the stars who filtered into the Staples Center were performers like Smokey Robinson, boxer Mike Tyson and the controversial Louis Farrakhan, head of the Nation of Islam.
After the Staples Center memorial service, the Jackson family and friends went to the Beverly Wilshire Hotel for a luncheon at 4:50 p.m. EST. It was unclear where the casket holding Jackson's body went immediately following the service.
Earlier, the city of Los Angeles closed portions of two of its famously jammed highways to make way for Jackson's convoy of Rolls Royces and lesser limousines. The body was escorted by a phalanx of police cars and motorcycles and tracked overhead by a fleet of media helicopters.
The destination was the Staples Center where thousands waited for the casket to be delivered for a memorial tribute that was watched live on TV and on the Web by millions around the world.
The Jackson family left their Encino home earlier today with dad Joe Jackson riding in the front seat of the first black Rolls enroute to a private service at the Forest Lawn Memorial Park cemetery. An hour later, Jackson's rose bedecked casket was brought out to a hearse for the ride to the Staples Center.
The memorial service, where brother Jermaine Jackson sang "Smile," the Charlie Chaplin song Michael covered in 1995, was scheduled to start at 1 p.m. ET, but was delayed more than 30 minutes.