The two women appeared on an elevated stage in front of the crowd Wednesday night, the eve of the Aug. 16 date when the rock and roll icon died at home in 1977 from a heart attack after battling prescription drug abuse.
Fans held up lit candles, illuminating their faces in orange light as they stood in the street outside the gates of Graceland, Elvis' longtime home and his burial place.
"You should see this from our point of view. It's amazing," Priscilla Presley said, standing alongside Lisa Marie. "The candles are lit. It's truly a sight to behold."
The two women stunned the crowd with their unexpected appearance. It was the first time both of them had appeared together at the annual gathering.
Later, fans who participated in the vigil moved up the tree-lined driveway to the right of the mansion, where the gravesite is located near a swimming pool. Heart-shaped wreaths made of red and white flowers lined the entrance to the site.
Mourners walked slowly through the tomb area, their candlelight casting shadowy figures against a stone wall.
Some teary-eyed fans laid flowers on the gravesite, where Presley's father Vernon, mother Gladys, and grandmother Minnie Mae Hood Presley also are buried.
"This is something that Elvis would never, ever have believed could have taken place here," she said.
Elvis admirers from around the United States and the globe have flocked each anniversary to Graceland to celebrate his life and career. His abrupt death at 42 shocked legions of fans still mesmerized today by his singing, sex appeal and on-stage charisma.
The vigil, which was set to run through Thursday morning, marked the high point of Elvis Week, an annual celebration of Presley's life and career. Organizers said about 75,000 people were expected by authorities to take part in the vigil.
Lisa Marie Presley told the fans she loved them for their devotion to her father. She also acknowledged she had shied away from making public appearances at past anniversary vigils.
"I've always avoided this because I felt that it would be too emotional, but I really felt it was important to come down here tonight," the singer's daughter told the crowd. "I love you very, very, very much."
Outside, some fans used chalk to draw pictures of Elvis's face on the street, where groups of fans set up folding chairs to wait for the line to die down.
Sergio Galleguillo, of Santa Cruz, Argentina, said he became emotional when he walked past the graves.
"I felt the spirit of Elvis there, as if he was alive," said Galleguillo, who was making his first visit to the United States. "It really was a beautiful experience."
Earlier Wednesday, a group from a Brazilian fan club waved that nation's flag, danced and sang Presley's early-70s hit "Burning Love" in the street in front of the entrance.
Steps away, an Elvis impersonator, complete with a white-sequined jumpsuit and red sash, sat alone in the street in front of the entrance, lip synching "In the Ghetto."
Many fans set up chairs along Graceland's outer wall starting early Wednesday morning, eager to get a good spot in line for the vigil.
Allen Black, 47, braved the scorching afternoon sun as he sat alongside the outer wall of Graceland. Black - who is from Aurora, Colo., scene of the July 20 movie theatre shooting massacre - said Elvis was a great performer but also someone who treated others well.
"For some people, it's the music, but for a lot of people, it's the man, the charisma, the humanitarian," Black said. "At first, they probably got drawn in by the music, and then the more they learn about the man, and the way he treated people, it draws them in even more."