The Edinburgh-born Olympian spearheaded the city's first Sky Ride event, which is part of a national campaign to get one million more people cycling regularly by 2013.
The 10km route was closed to all traffic other than bicycles for six hours. Radio 1 DJ Edith Bowman joined Hoy to lead the procession.
Hoy said: "It was fantastic being here in Edinburgh today and great to see so many people in my home town riding their bikes and enjoying a really good day out."
The six-times gold medal winner will be in Glasgow on Friday to join Scottish Olympians and Paralympians in a homecoming parade. He receives the freedom of the city of Edinburgh next Sunday.