"I've never played in daylight before!" joked Young, who went on stage first, adding "it's great to see everybody."
The event, which was originally billed as part of the Barclaycard presents BST series, went ahead as a solo concert without any sponsorship.
That's after he refused to perform at a festival bearing the name of what he called "a fossil fuel-funding entity".
On site, fans applauded the Canadian's decision to pull rank in order to make an environmental point. One fan told the BBC: "If an old rocker wants to pull his weight and knock some people around in the corporate world that's good, why not?"
Another agreed, saying: "If that's what he promotes and he's against that, then they are the people that need to do it - the people with a platform."
"That's the way forward, we need to be greener," added a third fan.
However, they all said they would not have supported the gig being pulled completely for the same reason.
"We might have got a refund!"
On site, fans applauded the Canadian's decision to pull rank in order to make an environmental point. One fan told the BBC: "If an old rocker wants to pull his weight and knock some people around in the corporate world that's good, why not?"
Another agreed, saying: "If that's what he promotes and he's against that, then they are the people that need to do it - the people with a platform."
"That's the way forward, we need to be greener," added a third fan.
However, they all said they would not have supported the gig being pulled completely for the same reason.
"We might have got a refund!"
There were loud cheers all around when the acoustic guitar and harmonica came out for a rendition of Heart of Gold. The singer-songwriter confirmed late last year that his search for one of those was indeed over after having married actress Daryl Hannah.
The first big set of the night ended with the extended wig-out of Rockin' in the Free World, before Young and his band returned for an encore which included the highlight of their set - a hypnotic version of Like a Hurricane.
His signature tune, Hey Hey, My My (Into the Black), was sadly notable by its absence.
Young and his hero Dylan had played on-stage together previously in 1992 - alongside Eric Clapton and Johnny Cash - at a New York gig to mark 30 years of the American's music, and before that at their friends The Band's last-ever gig in 1976, which was captured on film by Martin Scorsese in The Last Waltz.
Whispers murmured around Hype Park that it could happen again during Dylan's set, but alas, it was not to be.
As anyone who saw Scorsese's recent semi-fictional Dylan tour film, Rolling Thunder Venue, will testify, the 10-time Grammy winner has been keeping fans and band members alike on their toes his whole career and this gig was no different.
Dylan walked on unannounced, sat down at the piano with a grin and burst straight into Ballad of a Thin Man from his seminal 1965 album, Highway 61 Revisited.
While Young had ripped through a set of largely record-faithful live versions of his tracks, Dylan - who appears to no longer play the guitar - reworked many of his hits in different keys and with different melodies. Part of the fun and challenge of seeing him perform in 2019 is picking up on the correct tune before your neighbour does - as I managed on the re-worked It Ain't Me, Babe.
All of this prevented any real mass sing-alongs from breaking out early on as the crowd - which included Jarvis Cocker and Jake Bugg - watched a delighted Dylan re-paint his masterpieces live, getting up on his feet several times to strike some Elvis Presley-esque hip-shaking poses centre stage. But by the start of his mid-set classic Like a Rolling Stone most punters had gained the confidence to belt out the song's original vocal melody together in harmony like a giant backing choir behind the singer's off-kilter delivery.
These days, the 78-year-old's deeper voice seems to suit the blues-ier numbers - like the song Highway 61 Revisited - more than the ballads, although his heartfelt efforts on Simple Twist of Fate, Girl from the North Country and To Make You Feel My Love reminded us all why local London love song specialist Adele chose to cover him.
After a long day of music in the sun, large sections of the crowd began to lose interest as Dylan embarked on a hat-trick of later career tunes, although he soon won them back with an upbeat You've Gotta Serve Somebody, followed by an encore of an intriguing Blowin' in the Wind and the brilliantly-titled It Takes a Lot to Laugh, It Takes a Train to Cry.
Dylan's Travelling Wilburys buddy Tom Petty played his last-ever UK gig on the same stage two years earlier and despite widespread issues with sound blowing in the wind at festivals this summer, Hyde Park seem to have really nailed their outdoor sound system for big nights like these.
Barclaycard resumes its Hyde Park summertime takeover this weekend with performances from Florence + the Machine, The National and Robbie Williams. Let's just hope they wait until Neil Young is off site before those posters go back up.