Context. The Kilo-Degree Survey (KiDS) is an optical wide-field imaging survey carried out with the VLT Survey Telescope and the OmegaCAM camera. KiDS will image 1500 square degrees in four filters (ugri), and together with its near-infrared counterpart VIKING will produce deep photometry in nine bands. Designed for weak lensing shape and photometric redshift measurements, its core science driver is mapping the large-scale matter distribution in the Universe back to a redshift of ∼0.5. Secondary science cases include galaxy evolution, Milky Way structure, and the detection of high-redshift clusters and quasars. Aims. KiDS is an ESO Public Survey and dedicated to serving the astronomical community with high-quality data products derived from the survey data. Public data releases, the first two of which are presented here, are crucial for enabling independent confirmation of the survey's scientific value. The achieved data quality and initial scientific utilization are reviewed in order to validate the survey data. Methods. A dedicated pipeline and data management system based on A-WISE, combined with newly developed masking and source classification tools, is used for the production of the data products described here. Science projects based on these data products and preliminary results are outlined. Results. For 148 survey tiles (≈160 sq.deg.) stacked ugri images have been released, accompanied by weight maps, masks, source lists, and a multi-band source catalogue. Limiting magnitudes are typically 24.3, 25.1, 24.9, 23.8 (5σ in a 2 aperture) in ugri, respectively, and the typical r-band PSF size is less than 0.7 . The photometry prior to global homogenization is stable at the ∼2% (4%) level in gri (u) with some outliers due to non-photometric conditions, while the astrometry shows a typical 2D rms of 0.03 . Early scientific results include the detection of nine high-z QSOs, fifteen candidate strong gravitational lenses, high-quality photometric redshifts and structural parameters for hundreds of thousands of galaxies.