Marchers in Tehran carried portraits of revolutionary leader Ayatollah Ruhollah Khomeini and waved Iranian flags, chanting "Death to America," "Death to Israel," as they headed for the Azadi (Freedom) Square, Iranian media reported.
The country's official Islamic Republic News Agency said rallies took place at about 5,000 sites across the country, including Isfahan, Mashhad, Kerman, Shiraz and Tehran.
Under a heavy security in the capital, President Mahmoud Ahmadinejad praised the Islamic republic, calling it "glorious," the semi-official Fars news agency said.
Models of the Iranian F-313 Ghaher fighter jet and the Kavoshgar satellite were displayed in the Tehran square, the Mehr news agency reported.
Foreign journalists were permitted to cover the rallies from designated sites under close government scrutiny.
Mehr News ran a live video stream allowing people outside Iran to view the rallies. Mehr said the number of participants was double that of previous years in Tehran alone.
The rallies ended late in the morning when participants left to attend noon prayers in mosques.
In 1979, Shah Mohammad Reza Shah Pahlavi, was forced into exile by Khomeini.