Hundreds of thousands of people in Cairo's Tahrir Square are celebrating the overthrow one week ago of Hosni Mubarak as Egypt's president.
Organisers are hoping to maintain pressure on the new military government to implement democratic reforms.
There is a festive atmosphere, with military bands playing and people waving flags, correspondents say.
Leading Friday prayers at the square, a senior cleric called on Arab leaders to listen to their people.
Separately, scores of Mr Mubarak supporters are holding their own rally a few kilometres away from Tahrir Square.
Dressed in black, they held pictures of the ousted president, praising the man who led the country for nearly 30 years.
Inspired by the overthrow of the presidents of Tunisia and Egypt in recent weeks, there have been anti-government protests in Libya, Bahrain, Algeria and Yemen.
Television pictures showed massive crowds amid a sea of red, white and black national flags in Tahrir Square - the heart of the anti-government revolt.
People sang songs and chanted: "The army and people are united!"
Many came to the square with their children.
Influential Egyptian Sheikh Yousef al-Qaradawi said the Arab world had changed and leaders should listen to their people.
He also called for the release of all political prisoners and for Egypt's new military leaders to form a new government.
"I call on the Egyptian army to liberate us from the government that Mubarak formed," Mr Qaradawi said.
Mr Mubarak stepped down one week ago and handed power to the leaders of the country's armed forces - the Higher Military Council.
The cabinet currently in place is much the same as one that Mr Mubarak put in place days before he left office.
The coalition of young activists and pro-democracy groups that led the 18 days of protests that culminated in Mr Mubarak's downfall are worried that the army will go back on promises to implement political reforms.
The coalition is also pressing for the release of political prisoners, an investigation into the deaths of protesters during the uprising and an end to the decades-old emergency law.
The health ministry has said at least 365 people died during the protests.
"This is a serious message to the military," said Mohamed el-Said, who travelled from Port Said to be at the rally.
"After today, it will be more than obvious to them that if they don't protect the revolution and respond to the people's demands, the next time people go down to Tahrir won't be to celebrate victory, but they will bring their blankets with them like before."
Anti-corruption campaigners have also been pressing prosecutors to open an investigation into the Mubarak family's assets, put at anywhere from $1bn to $70bn.
On Thursday, Egypt's new authorities arrested three of his former cabinet ministers for corruption, including the feared former Interior Minister, Habib el-Adly, and steel tycoon Ahmed Ezz, a close Mubarak ally. All denied any wrongdoing.
'Egypt is fun'
Life in Egypt remains disrupted, with tanks on Cairo's streets, ongoing strikes and banks and schools closed.
The Higher Military Council has pledged to "put matters back on track" but has asked Egyptians to help them.
"The armed forces do not have future ambitions and want to hand power to the civilian parties when they are strong so that they don't collapse," spokesman Gen Ismail Etmaan said on state TV earlier this week.
On Friday, some demonstrators - fearful for Egypt's suffering tourism industry - marched with banners in foreign languages to support tourism.
"Hosni is out, Egypt is fun," one poster said. "Visit the land of peace," said another.