Italian Prime Minister Silvio Berlusconi also attended the ceremony as Italy's ENI oil company was a key partner in construction of the pipeline.
Erdogan, speaking at the inauguration ceremony outside of Samsun, said Turkey's aim was to become an energy hub between east and west.
Putin said the gas pipeline is another step toward building a common European energy area.
The $3.2 billion Blue Stream project is the world's deepest underwater pipeline. The official inauguration today comes two years after gas began to flow through the pipeline.