The Duke thanked the guests attending the £150 ticket event for not letting "a little rain spoil a good day out" and praised his "granny" as someone "we all look up to in good times and in challenging moments to set an example''.
The Queen in response made the crowds laugh when she joked about future renditions of Happy Birthday: "I much appreciate the kindness of all your birthday wishes, and have been delighted and moved by the many cards and messages I have received.
"How I will feel if people are still singing Happy Birthday to me in December remains to be seen.''
William, who was joined by Kate, Prince Harry and the Duke of Edinburgh, asked the crowds gathered in The Mall: "I hope you won't mind if I say a personal thank you to the Queen - and to do so on behalf of all her grandchildren - and great-grandchildren.
"Granny, thank you for everything you have done for your family. We could not wish you a happier birthday.''
He also said: "My family has had plenty of reason to celebrate since the Queen turned 90 in April.
"The Queen's strong health and relentless energy; her sharp wit and famous sense of humour; and the fact that the Queen remains very much at the helm of our family, our nation and the Commonwealth."
Before she made an appearance the Queen was spotted peeking through a Buckingham Palace window as the persistent rain fell.
Party-goers were banned from bringing umbrellas on to the site, with organisers handing out ponchos - 12,500 of which were ready and waiting.
But the heavy showers, forecast by the Met Office who had issued a yellow rain warning, left many bedraggled and a few guests claimed the promised supply of ponchos ran out.
During a walkabout to meet revellers both Harry and William mentioned the umbrella ban with the Duke sympathising, and telling one guest: "I'm sorry, I think that's probably a security thing because of us".
Two-year-old Prince George also commented on the day's bad weather, Kate revealed to Ella Hunter-Gibbs, 19, from Surrey.
The teenager said: "She was saying that George opened the door today and said, 'it's not very nice out today Mummy, is it?'. She said 'No, it isn't George'."
Harry was in mischievous mood and asked one party-goer their opinion of the "neon" green outfit his grandmother wore to yesterday's Trooping the Colour ceremony.
And he raised the subject of Brexit with dairy farmer Mike King, 46 and his wife Rachel 48, from Iron Acton, near Bristol - but kept his own views close to his chest.
Mr King said: "I told Harry we were farmers and were hardy so we're just used to the wet. When he heard we were farmers he said 'in or out?' and I said I was going to ask him the same.
''I said 'I'm undecided' and he said 'I'm not allowed to say'.''
There was universal praise from the partygoers for their hampers filled with pork pies, Pimms and cupcakes among other treats.
A procession of dancers and marching bands entertained them with a carnival parade that was staged again for the Queen when she arrived and she watched from a royal box with her family.
Spotted among the guests were a few famous faces including Only Fools And Horses Actor David Jason and Prince Albert of Monaco who chatted to the Duke of York.
At one point the crowds were treated to the sight of the Queen and Philip in the open top state review Range Rover followed by a similar vehicle with William, Kate and Harry stood up in the back.
Peter Phillips, the Queen's grandson, masterminded the open air Patron's Lunch to mark the monarch's patronage of more than 600 charities and organisations.
Earlier in the day Audrey Asquith, from Reading, praised the event as she sat in the rain wearing a poncho and eating an ice cream.
She said: ''I think this is wonderful, I would have walked through fire (to be here).''
She and her husband had bought their tickets for the Patron's Lunch and they had spent last night in London to ensure they would not be late for the start of the event.
She added: ''We can't be bothering about the weather otherwise we wouldn't go anywhere in England.''