The annual protests take place on the anniversary of the city's return to China by colonial power Britain in 1997 but saw one of the lowest turnouts in history this year.
Thousands of people have taken to the streets of Hong Kong for annual July-first pro-democracy demonstrations.
Earlier, police reportedly stopped about twenty protesters from gaining access to a flag-raising ceremony.
It was held to mark 21 years since the handover of Hong Kong from British to Chinese rule.
Hong Kong is a former British colony that was returned to China in 1997 under a "one country, two systems" formula guaranteeing it a high degree of autonomy and the promise of eventual universal suffrage.
The demonstrations come as anger over China's tightening grip on the territory continues to grow.
Organisers said 50,000 protested, in one of their lowest estimates since the annual march started in 2003. Police said 9,800 attended at the peak - the lowest figure on their record.
Hong Kong's opposition has lost much steam in the past year, which saw elected pro-democracy legislators disqualified and some of the most prominent activists jailed.
Still, the mood was defiant on Sunday, with one of the most common chants being "Hong Kong people, keep going."
Hong Kong was guaranteed wide-ranging autonomy after 1997, but Beijing's refusal to grant it full democracy triggered massive street protests in 2014 and deepened resentment toward China's perceived growing encroachment on the territory, where its influence in nearly every facet of life has increased.
Since the 2014 Umbrella Movement, leading pro-democracy activists have been prosecuted on protest-related charges.
Pro-democracy and pro-independence activists have also been barred from standing for office in Hong Kong's partially elected system, or ejected from seats they had won through a public vote.
TRT World's Patrick Fok reports from Hong Kong.
Other rights groups also joined the march, including LGBT campaigners as well as protesters calling for better living conditions and equality in the densely packed city, which has an ever-widening wealth gap.
Protesters included elderly people in wheelchairs, couples with sleeping toddlers and young residents, some of whom waved banners saying: "End one party rule; Against the fall of Hong Kong."
While Hong Kong activists push for greater democracy, Beijing has been taking a tougher stance on the city, and some Hong Kong residents say the old border that has defined the city's autonomy is slowly withering away.
In response to the rally, the government issued a statement saying it safeguarded "core values" including freedom and democracy and the semi-autonomous "one country, two systems" set-up under which Hong Kong is ruled.
The government said in a statement that "chanting slogans which disrespect 'one country'" was not in line with Hong Kong’s overall interests and would undermine its development."
The largest July 1 rally took place in 2003, when half a million people marched against a proposed anti-subversion law, which was then shelved.
At a ceremony early on Sunday to mark the handover anniversary, Chief Executive Carrie Lam asserted that the "one, country, two systems" framework remains intact under her watch.
Lam took over as governor of Hong Kong a year ago, pledging at a ceremony attended by Chinese President Xi Jinping to be accountable to both Beijing and Hong Kong.
"Without fear, we correctly deal with our relationship with the central government. And we promote a stronger understanding of the constitution, the Basic Law, and national security in all sectors," Lam said at a Sunday morning cocktail reception.
The protest in pictures: