Peake said it was “a privilege” as he became the first official British astronaut to walk in space after leaving the International Space Station (ISS) to repair a broken power unit.
The 43-year-old, from Chichester, West Sussex, was accompanied by Nasa colleague Colonel Tim Kopra, 52, for the six-and-a-half-hour operation.
A live feed on the Nasa website showed the moment Major Peake tentatively emerged from the ISS, where he has stayed since leaving Earth on December 15 for a six-month mission, with the Union flag on the shoulder of his space suit.
As he prepared to exit the air lock, one of his colleagues, Commander Scott Kelly, took a moment to point out it was “really cool” to see the Union flag outside.
Mr Kelly said: “The Union Jack has explored all over the world, now it’s exploring space.”
Major Peake replied: “It’s great to be wearing it. A privilege, a proud moment.”
The two checked each other’s equipment with the help of mission control in Houston.
They ventured outside to replace a voltage regulator that broke in November. The station has operated unaffected using the remaining seven power units.
The astronauts need to work in 45-minute blocks of daylight, then complete darkness.
The spacewalk has been timed to the minute so that the power unit can be removed in darkness, when it has no electrical potential.
Viewers of the feed saw a point-of-view perspective from helmet cameras as the two astronauts negotiated their way along the exterior of the station.
From Earth, spectators took to Twitter to express amazement and wish the astronauts good luck.
Sir Paul McCartney wrote: “We’re all watching, no pressure! Wishing you a happy stroll outdoors in the universe.”
Earlier, Prime Minister David Cameron posted: “Good luck to @astro_timpeake on today’s #spacewalk. The country will be watching you make history #ScienceIsGREAT”
Musicians Pixie Lott, The Who, Peter Gabriel and the Pet Shop Boys also sent messages of support.