Gemayel, 34, was a scion of one of Lebanon's most prominent Christian families. His death added to tensions in a country where the Syrian-backed group Hizbullah is maneuvering to bring down a Western-leaning government.
Gunmen also opened fire on the Beirut office of another anti-Syrian figure, state minister for parliamentary affairs Michel Pharaon.
People from across the political spectrum called for calm in a country deeply divided between allies and opponents of former powerbroker Syria, but angry young men burned tyres in Beirut's Christian neighbourhood of Ashrafiyeh. The anti-Syrian camp called for a massive turnout at Gemayel's funeral on Thursday. The service will be held in downtown Beirut, before the body is taken to his home village of Bikfaya, in mountains east of the capital, for burial.
The murder took place on the eve of the anniversary of Lebanon's 1943 independence from France, and celebrations were quickly cancelled.
Gemayel was critically wounded in the attack and died soon afterwards in a nearby hospital, a security source said.
The state news agency said Gemayel was killed "by gunshots on his convoy near the Mar Antonios church in the region of Jdaideh." His bodyguard, Samir Shartuni, was also killed.
Witnesses said Gemayel was apparently driving when his car was attacked.
Security sources said that the car was rammed from the front, and that gunmen stepped out and shot him point-blank in the head, in an gangland-style killing.
Dozens of family members and friends rushed to the hospital, many of them shouting angrily and others wailing.
Leading them was Gemayel's father and former president, Amin, who called for restraint from his followers.
"We do not want instinctive reactions or revenge. We are thinking about how to protect ... Lebanon's freedom," he told the tearful crowd.
After news of the murder, panic spread across the capital. Cars horns honked amid giant traffic jams, as many people rushed to go home.
Tyres were burnt, cars damaged and posters of Hizbullah's Christian allies were torn apart in Beirut and in Bikfaya.
Television channels interrupted their normal broadcasts to air classical music.
Prime Minister Fuad Siniora said "assassinations will not terrorise us. We will not let the criminal killers control our fate."
"It is time for all Lebanese to unite," he told journalists.
Hizbullah warned that the assassination was aimed at pushing Lebanon back to civil war.
"There is no doubt at all that those who committed this crime want to push Lebanon into chaos ... and civil war," said the powerful opposition group which is also backed by Iran.
The Shia movement, which sparked a devastating war with Israel this summer after capturing two of its soldiers, has been demanding that its pro-Syrian Christian ally, General Michel Aoun, be brought into government.
It recently pulled out of the cabinet in a deadlock with the anti-Syrian majority over the issue and threatened to take to the streets peacefully to push its demands.
Prominent Christian leader Samir Geagea called for the immediate resignation of Damascus protege President Emile Lahoud, who himself denounced the killing as a "terrorist act."
And the head of the anti-Syrian majority in parliament, Saad Hariri, broke off a press conference to accuse Syria of "trying to kill every free person" in Lebanon.
"The cycle (of killings) has resumed," he said.
Hariri was referring to a series of assassinations and attacks in the past two years. These included the murder of his own father, former premier Rafiq Hariri, in a massive bomb blast on the Beirut seafront in February 2005.
That killing was widely blamed on Syria and its Lebanese allies, a charge Damascus has roundly denied. It sparked protests that forced Damascus to end nearly three decades of military domination in Lebanon.
Hariri told CNN he believed Gemayel's killing was linked to a looming UN Security Council decision to endorse an international court to try suspects in the murder of his father.
"We believe that the hands of Syria are all over the place," he said.
"This is not a time to give up. Blood has been shed to free our country from the hands of the regime, from the regime that was involved in killing Rafiq Hariri, in killing a lot of people," he said.
The UN Security Council was close on Tuesday to approving a measure that would set up the international court.
Syria's official SANA news agency condemned Gemayel's murder as "a crime aimed at destabilising Lebanon and disturbing the civil peace in the country."
In Washington, the Syrian embassy issued a statement expressing "outrage" at the killing.
It said "this charade of blaming Syria for every malicious event in Lebanon has been exposed a long time ago and is, simply, losing all credibility."
"It's no coincidence that Pierre Gemayel was assassinated on the day the Security Council is discussing a Lebanese issue," the statement said.
Lebanese Social Affairs Minister Nayla Moawad, a Christian whose husband was also killed while serving as president, accused Damascus of seeking to kill ministers to force the collapse of the Beirut government.
Gemayel was the first anti-Syrian figure to be assassinated since journalist Gibran Tueni was killed by a bomb on last December.
He was the nephew of Bashir Gemayel, who was murdered in 1982 at the height of Lebanon's 15-year civil war, only nine days before he was to be sworn in as president. Amin Gemayel was elected to replace him, and he served until 1988.
Pierre was the namesake of his grandfather, who founded the Christian Kataeb (Phalangist) party in the 1930s.
Born on September 23, 1972, he was elected to parliament in 2000 and became industry minister in July 2005. He was married, with two sons.
George W. Bush and a chorus of other world leaders condemned the slaying, and the US president called for an investigation and immediate UN action in response.
Bush accused Iran and Syria of promoting "instability" in Lebanon, but did not tie them outright to the killing.

Copyright AFP (Agence France-Presse), 2006