The 100,000-plus people who were thought to have flocked to see her sang along to hits including 'Jolene' and 'Blue Smoke', while many paid homage by dressing up as the star.
But although she went down a storm with those watching, many viewing her set as it was broadcast on TV questioned whether the singer was miming.
A spokesman for the star rubbished the claims, saying: "No, she sings live.
"Some people don't know an amazing singer when they hear one."
As promised, Parton appeared in white, dressed in a rhinestone-encrusted waistcoat and matching trousers, after saying previously that the colour went well with the brown mud.
Parton told the adoring crowd it was "such an honour and such a thrill to be here at Glastonbury Festival".
"I've been waiting a lifetime for this and of course we want all of you to have the best time," she added.
The 68-year-old has been the most talked about act of the festival, with excitement building ahead of her taking to the Pyramid Stage for what has become know as the Sunday Afternoon Legend's Slot following other artists including Ray Davies, Shirley Bassey and James Brown.
Parton, who said she had composed a special "mud" song in honour for her trip to Glastonbury, was also joined on stage by Bon Jovi guitarist Richie Sambora for Lay Your Hands On Me.
The crowd stretched back in all directions with all the walkways leading to the stage full and many complaining they had no chance of seeing the diminutive star.
But as she began classic Nine to Five they erupted into cheers, singing along and dancing on the spot.
Kim Tew, 52, from Corby, Northamptonshire, said: "I think she's fantastic. I've listened to her for a very long time, she was a favourite of my mother's.
"She looks amazing - she's still got it."
Jane Riddiford, 44, from Caerphilly, said: " She's just fantastic. She's been going for years. I knew she would put on the show of the festival."
Earlier, Parton told a press conference backstage that she had planned to play some of her more upbeat tracks from her extensive back catalogue.
"I can't do a bunch of sad songs because everyone is drunk and high," she said.
Describing Glastonbury as the "biggest festival in the world", she added: "I thought I had to write a song about the Glastonbury mud, even though the sun's shining today."
She said the conditions underfoot made her feel at home as she grew up in Tennessee on a farm.
"I'm just a country girl and now I feel like a rock star," she added.
The singer was speaking as she was presented with an award backstage at the festival in recognition of her having sold 100 million records worldwide.
Despite being in the music business for over 30 years, Dolly has never performed at a UK festival before. With 42 albums to her name, the country legend isn't exactly short of material - expect rhinestones, big hair, more rhinestones and plenty of sing-a-long opportunities. The Pyramid Stage,16.20 on Sunday
The Haim sisters popped up everywhere at last year's event, performing secret gigs and providing backing vocals for Primal Scream. Watch out for Este's famous 'bass face'. The Other Stage at 16.25 on Friday
Lily's love for Glastonbury is well-documented so it's no surprise that her comeback tour includes a stop at Worthy Farm. The Pyramid Stage at 18.30 on Friday
Lauren Mayberry fronts Glaswegian trio Chvrches, who are described by the festival organisers as "Depeche Mode in the early '80s, with Dave Gahan replaced by a sweet, Scottish brogue. The John Peel Stage on Friday at 19.45
Electro pop duo Goldfrapp have evolved considerably in recent years, leaving fans guessing over what to expect - rock'n'roll stage antics or a laid back folk set? Your guess is as good as ours. West Holts Stage, Saturday at 20.30
Blondie will be kicking things off relatively early on Friday, with their first gig at Worthy Farm since 1999. The Other Stage at 12.20 on Friday
Since first coming to everyone's attention on the BBC Sound of 2011 list, Anna Calvi has scored Brit Award nominations and made it on to the Mercury Prize shortlist. The Park Stage at 20.00 on Saturday
London Grammar, led by Hannah Reid, are the perfect alternative if you don't fancy seeing Pyramid Stage headliners Kasabian. John Peel Stage, 22.10 on Sunday
Swedish singer Lykke Li has the interesting task of following on from Chvrches and supporting the Kaiser Chiefs. The John Peel Stage, Friday at 21.15
Lana, who performed at Kanye West and Kim Kardashian's pre-wedding party at Versailles, will be giving her first live performance since her album 'Ultraviolence' stormed straight to the top of the UK chart. The Pyramid Stage at 16.00 on Saturday
Beth Orton's Saturday evening set is the perfect way to chill out before the night's festivities get underway. Avalon Stage at 20.15 on Saturday
With performances at the O2 and Wembley Stadium and Coachella Festival already under her belt, Ellie is no stranger to huge crowds and group sing-a-longs. The Other Stage, 20.30 on Sunday
Earlier festival organiser Michael Eavis said he - like most people on site - was excited about seeing the country queen perform.
"I'm really looking forward to hearing some of her songs live for the first time in my life," he said.
Kasabian follow Arcade Fire and Metallica as headliners tonight, while Bombay Bicycle Club, Massive Attack and Ellie Goulding were also performing across other stages today.
The last day of official acts saw the rain that had been forecast fail to materialise, with revellers enjoying mainly sunshine all day.
Once all festival-goers have left the Somerset-site tomorrow the big clean-up begins, with hundreds of volunteers and workers involved. It will take up to six weeks to restore Worthy Farm to its normal state.