The 18-year-old gymnast waved to the crowd while riding on the back of a pink Saab convertible along the rural parade route. Liukin won five medals at the Olympics in Beijing, including gold in the all-around competition. She also helped the U.S. win silver in the team competition.
Organizers of the parade said a few days ago they had to turn away some would-be participants because there wasn't enough space in the line.
"For a little town to have a parade that big was amazing," said Joe Cordina, mayor of Parker, which has about 3,300 residents and is located approximately 20 miles north of Dallas. Cordina said the town's first parade went "incredibly smooth."
The mile-long event included U.S. marshals on horseback, an antique fire engine, a rock band playing My Girl and flatbed trucks filled with local scout troops. Most everyone waved American flags, long slender peacock feathers or congratulatory signs for Liukin.
North Texas resident and 2004 Olympic gold medalist Carly Patterson also took part, riding in a green convertible Jaguar. At a private reception after the parade, Patterson sang the Star-Spangled Banner . Liukin received numerous gifts, including a painting, plaques and proclamations from area mayors and other public officials.
Cordina gave Liukin the keys to the city.
Sen. Kay Bailey Hutchison of Texas, whose son awarded Liukin a U.S. flag that had flown over the Capitol, told Liukin "You were robbed! No doubt about it," referring to the gold-medal tiebreaker Liukin lost on the uneven bars in Beijing.
Liukin seemed overwhelmed by the tributes, presents and turnout.
"I thought there would be a few people but the parade was amazing and this tops it all," she said. "I'm speechless."