Principal Phil Winston made opening remarks, but the ceremony was dominated by student speakers and performers.
Student body president Uma Veerappan, who received the Viking Award for outstanding student leadership, highlighted individual students for their cultural awareness, social activism and athletic achievements.
She also injected a humorous anecdote about Spanish teacher Josep Vericat.
"He once told a student who was studying for another class in our Spanish period, 'Cierra tu libro antes de que cierro tu vida,' which in ... English translates to 'Close your book before I close your life,'" she said. "Thank you, Señor Vericat, for being such a humorous disciplinarian."
Senior Emilee Osagiede, who auditioned and was chosen to speak by school staff, titled her talk, "Keep Fighting." She opened with a quote from Dr. Seuss: "Congratulations, today is your day, you're off to great places, you're off and away."
She said she turned to the author to help her with bad childhood experiences.
"I was in a dark and scary place; I was lonely and lost," she said. "I needed something; I needed anything to bring me out of that hole."
Osagiede said the quote's reference to future rather than past achievements emphasizes the values of perseverance and hard work. She said people who have experienced child abuse, the death of a parent and living in foster care can be successful.
"If you keep pushing and you keep fighting, you can do marvelous things," she said. "Even for the girls and boys who have the odds stacked up against them."
Lindsay Black provoked a playful reaction from principal Winston when she approached the stage while he was introducing her.
"You're walking up here already, girl?" Winston said. "What are you doing to me?"
Black sung "What A Wonderful World," receiving some of the louder applause of the evening.
"I'm hoping she'll go and use her ... God-given abilities. She's a smart girl," said her grandmother Auressia Black, who noted that Lindsay is headed to Howard University. "Whatever it is, as long as it's productive."
Palo Alto Unified School District board member Dana Tom formally accepted the class of 2012 from Winston and handed out the diplomas.
Tom's son, Skyler, was among the graduates.
"Every time I think of my son graduating, I shake my head in disbelief," Tom said. "Kids grow up in the blink of any eye."
Following tradition, male students wore green caps and gowns while female students wore white. Many adorned their caps with the logos of the universities they will be attending next year.
Adam Young plans on studying screenwriting and hopes to transfer to San Jose State University after attending Foothill College. He told the Weekly he was surprised with how quickly high school went by.
"Freshman year I thought I'd never get out of here," he said, "but by senior year it felt like by a snap of my fingers I was done."
Mark Nishimura will be attending Stanford University and credited Ronald Pruzan with sparking his interest in chemistry. He said he discovered the types of people he likes to hang out with during his time at Paly.
"No matter how we measure intelligence, everyone here has something about them that's amazing," he said.
Rachelle Bains said she had to deal with deaths and health issues throughout high school and struggled to meet graduation requirements.
"I've gotten a lot of support from staff at Paly," she said. "They made it easier."
She said she's still waiting to hear from Loyola Marymount University, where she wants to study business management.
Mary Colbert of Petaluma came to see the graduation of a family friend and favorably compared the level of student involvement to that of her own daughter's recent graduation.
"I've been to 80,000 high school graduations in the last two years," Colbert joked. "By far this is the most stellar and inspiring and really celebratory about the students," she said.
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