Viewers can choose from 400 hours of programs, between 60 and 70 percent of the total TV output, including hit shows such as "EastEnders, "Doctor Who" and "Planet Earth."
It faces competition from similar services provided by Channel 4 and ITV and from increasingly popular video-sharing sites such as YouTube.
Broadcasters are under pressure to hold on to viewers by letting them watch programs when and where they want.
"Our vision is for BBC iPlayer to become a universal service available not just over the Internet, but also on cable and other TV platforms, and eventually on mobiles and smart handheld devices," said the BBC's Ashley Highfield, director of future media and technology.
The service, at www.bbc.co.uk/iplayer, is free, but people will not be allowed to save permanent copies to their computer. It could take 30 minutes to download an hour-long show.
It is only available to people living in Britain with computers that run the Microsoft XP operating system.
Programs will be automatically deleted after viewing or after 30 days. Copyright protection software will prevent the copying of shows.