He said that if he is elected, his first executive action would be to recommit the U.S.to the Paris Climate Accord that President Trump abandoned a year ago.
Castro isn't a neophyte on the national scene. "Well, there is a crisis today".
"I am a candidate for president of the United States of America", he told the cheering crowd.
He made the announcement as a government shutdown drags into the longest in USA history, and as the field of 2020 contenders widens.
Until now only former congressman John Delaney has formally launched a campaign, more than a year ago.
More than a dozen potential Democratic candidates are exploring a possible run for president in 2020.
His launch comes a day after news emerged that Hawaii Congresswoman Ms Gabbard would also announce a bid.
Castro is getting an early start in trying to stand out. That stalemate, along with Trump's hard-line immigration stands, drew sharp rebukes from Castro. He spoke about the need to address climate change.
San Antonio, he said, "represents America's future: diverse, fast-growing, optimistic, a place where people of different backgrounds can come together to create something truly special".
"Yes, we must have border security, but there is a smart and humane way to do it".
Launching his bid under the slogan "One nation, one destiny", he said: "We say no to the construction of the wall and yes to the construction of communities". There are about 700,000 young "Dreamers" who were brought into the US illegally as children; advocates want to provide them with protection deportation and a chance to apply for citizenship.
His identical twin, Rep. Joaquin Castro, will serve as his campaign chairman, according to a campaign press release provided to CNN. The Spanish-style plaza in the Castro twins' boyhood neighborhood was packed with supporters who streamed through the gates between a mariachi band.
Mark Jones, a political analyst at Rice University in Houston, who has followed Castro's career, says despite this, his chances of securing the nomination in what is certain to be a crowded field are slim at best. Kamala Harris and New Jersey Sen. Former Texas Rep. Beto O'Rourke is doing little to dim speculation that he might jump into a field that has no clear front-runner.
Castro, the former mayor of San Antonio, had been considering a bid for almost two years and announced a presidential exploratory committee in December. Ted Cruz, R-Texas.
Castro may not be the only Texan in the race, however. In 2010, Time magazine named him as one of the "40 under 40" rising American political stars.
Strategically, he reminded the crowd about his powerful speech at the Democratic National Convention in 2012.
Two years later, President Obama chose him to run HUD. He was also famously considered a frontrunner to be former Secretary of State Hillary Clinton's running mate in 2016, but she ultimately went with Senator Tim Kaine. During Castro's trip this past week to Nevada, one state Latino business leader told Castro that he should again be a top contender for vice president if his campaign falls short.
In a video announcing the exploratory committee last month, he highlighted the importance of good health care, education and a clean environment.