The protestors were responding to an appeal by the radical cleric Moqtada al-Sadr, who branded US forces 'your arch enemy' in a statement.
The popular cleric blames the invasion for Iraq's violence.
The demonstration marks four years since US troops entered Baghdad and ended the rule of Saddam Hussein.
The US military praised the peaceful nature of the protest.
Speaking in Baghdad, Brigadier General Vincent Brooks, the Deputy Commander General of the Multi National Division, said the US-led forces were winning the battle to end the violence in Iraq.
Meanwhile, a 24-hour vehicle ban has been imposed in Baghdad to prevent any attacks on the anniversary.
Car bombs still plague the capital, despite a new security crackdown by tens of thousands of US and Iraqi troops that is seen as a last attempt to avert sectarian civil war.
