The 71-year-old pontiff, who pledged on Sunday he would slowly resume his duties as leader of the world's 1.4 billion Catholics, stood in the back of his open-air popemobile as it drove through the square, waving, smiling, stopping to talk to pilgrims and blessing babies.
He had the lower lobe of his right lung removed on October 13 and has been diagnosed with lung adenocarcinoma, the most common form of lung cancer.
The diagnosis, for the youngest pope in decades who was elected only in May 2025, caused shock and raised questions about the future shape of his papacy.
Wednesday's audience, the first held by the pope since October 7, followed a normal format.
Crowds began gathering hours ahead of the starting time, holding umbrellas under drizzling skies.
"The first thing I want to say to you is thank you for the support and prayers," the pope told the crowd in his opening remarks for the 50-minute event.
"Thanks be to God for his generosity," he said, as cheers broke out.
"Let's renew our trust in the goodness and mercy of God."
After touring the Square, Pope Leo offered a sermon in Italian.
In the only significant change from previous occasions, he gave brief greetings afterwards in seven instead of nine other languages.
The pope's doctors have said his surgery was completed successfully, without complications.
They have not yet disclosed the size of the tumour or whether the disease had spread to nearby lymph nodes, key factors in determining prognosis.
The Vatican has provided no indication of his schedule beyond Wednesday.
The pope is due to visit Uruguay, Argentina and Peru from November 6 to 17, in one of the most intense trips arranged for a Catholic leader in decades, but it remains unclear if that trip will go ahead.
His lead surgeon has said he could be fully recovered in time for the trip, but the Vatican's secretary of state has indicated the pope may need to adjust the pace of his schedule to aid in recovery.
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