Sheeran was playing the second night of the iTunes Festival at London's The Roundhouse and was joined by a host of special guests during the encore to his near two-hour set.
Introducing 'Chasing Cars' as "one of the top 20 songs ever written", Sheeran strummed along with his acoustic guitar before Lightbody joined the stage to huge cheers from the crowd.
Sheeran then went on to finish his set with a 20-minute rendition of his single 'You Need Me, I Don't Need You', for which rappers Devlin, Sway, Chip and Wretch 32 all joined him for a verse each.
Imploring the crowd to sing along throughout the set, Sheeran was in a jubilant mood, dividing the crowd into sections to form what Sheeran called his "gospel choir".
Earlier in the evening, Rudimental and Charli XCX both played sets as part of the festival, with Charli XCX performing her singles 'Nuclear Seasons' and 'You're The One'.
Sheeran performed Pink Floyd's 'Wish You Were Here' with the band's Nick Mason at the Olympics closing ceremony last month, leading many of the singer's fans to believe the song was a new Sheeran track.
Below: click to see photos of Sheeran performing live in Italy