The opening ceremony, which was televised to 186 countries, featured Bali's Kecak dance and a parade of all 131 contestants.
Following days of protests by Indonesian hard-line Muslim groups and the rejection of the contest by a leading clerics' organization, the government announced Saturday that it was moving the Sept. 28 final round to Bali. It was initially set to be held in Sentul, on the outskirts of the capital, Jakarta.
Bali is the only Hindu-dominated province in Indonesia, the world's most populous Muslim country.
Controversy over the pageant has been mounting in Indonesia, which has a reputation as a tolerant, pluralist society that respects freedom of expression.
The Indonesia Ulema Council, the country's most influential clerics' organization, and the hard-line groups Hizbut Tahrir Indonesia and Front for Islamic Defenders have urged the government to cancel the event. They have argued that the exposure of skin by women in a competition violates Muslim teachings, even after organizers agreed to cut the bikini competition and instead outfit contestants in more conservative sarongs.
The chairwoman of the Miss World Organization, Julia Morley, has promised that none of the contestants will wear a bikini. The pageant began in the 1950s, and the first winner was crowned in a two-piece bathing suit.
"We only want to try to find the best way of working together," Morley told a news conference Saturday in Bali.
Most Muslims in Indonesia, a secular country of 240 million people, are moderate, but a small extremist fringe has become more vocal in recent years.
Lady Gaga was forced to cancel her sold-out concert in Indonesia in May following threats by Islamic hard-liners who called her a "devil worshipper." Jennifer Lopez toned down her sexy outfits and dance moves during a show in Jakarta last December.