The director of Edward Scissorhands and Beetlejuice threw the switch around 21:30 BST after rapper Professor Green played to the crowds.
The free event took place on the promenade at The Headlands Arena in front of the Tower.
Burton, 58, used Blackpool for scenes in his latest film. "Miss Peregrine's Home for Peculiar Children."
"To be given the town's highest honour is incredible and I'm really excited. I'm sure it will be a wonderful show," he said.
The California-born film director achieved fame directing blockbusters including Corpse Bride, Planet of the Apes, Charlie and the Chocolate Factory and Alice in Wonderland.
Describing himself as Blackpool Pleasure Beach's "biggest fan", Burton chose to shoot scenes in Blackpool for The Killers'  music videos Here with Me and Battle Born.
The Illuminations end on 15 November.
Hollywood director Tim Burton has switched on this year's Blackpool Illuminations.