Holland asked his girlfriend to join him on stage where he got down on one knee and asked her to marry him.
The tug-at-your-heartstrings moment saw the Sussexes' faces light up with joy, as Meghan looked to Harry with a delighted smile.
The annual event marked the couple's first engagement since announcing their decision to "step back" from their royal duties.
Meghan joined Harry in the UK on Wednesday after spending six weeks away from the media spotlight on Vancouver Island in Canada.
But the 38-year-old made it clear that she will maintain strong ties with the nation, as she flew the British sartorial flag in a teal-hued dress by Victoria Beckham.
A Stella McCartney clutch bag (another homegrown label, tick!) and navy Manolo Blahnik BB pumps completed the ensemble.
The Duke and Duchess of Sussex are expected to join the rest of The Firm at the Mountbatten Festival of Music on March 7.