The animated sequel took £5m over its opening weekend far ahead of Avatar's £1.3m total. Puss in Boots' opening weekend was more than double that of the first film which was released in 2011 and nominated for an Oscar.
M Night Shyamalan's Knock at the Cabin premiered at number three, grossing just under £1m while Bollywood hit Pathaan continued to do good business at number four on the way to becoming the most successful Indian film of all time in the UK.
Starring Shah Rukh Khan, the action film became the first Indian movie to take over £3m at the UK box office.
Rounding out the top 5 was Gerard Butler's Plane in its second week of release. The well-received actioner has grossed over £2m in the UK.
Starring Antonio Banderas as the titular cat, The Last Wish sees Puss in Boots lose eight of his nine lives and attempt to restore them by finding a a wishing star.
It is the first film in the Shrek universe since the first Puss in Boots movie over a decade ago.
Eddie Murphy recently said he would be open to a new Shrek movie or a spin-off based around his character Donkey.
Speaking to Entertainment Tonight, Murphy said: “I’d absolutely be open if they ever came with another Shrek, I’d do it in two seconds. I love Donkey."
Read more: The best and worst movie spin-offs
He also appeared to take a shot at Puss in Boots: “You know, they did Puss in Boots movies. I was like, ‘They should have did a Donkey movie. Donkey is funnier than Puss in Boots.’ I mean, I love Puss in Boots, but he ain’t funny as the Donkey.”
Responding to Murphy, Puss In Boots: The Last Wish's director Joel Crawford told Yahoo: “Oh, classic donkey."
"It’s so funny because that's so in character for Donkey and Puss In Boots.
"They're both always going after each other for who gets Shrek’s appreciation.”
Watch: Joel Crawford talks to Yahoo about Eddie Murphy's Donkey dig