It marks the first time since the break-up of the Soviet Union in 1991 that a parade has been held in Moscow’s Red Square to mark the holiday, also known as International Workers’ Day.
It was a key date on the Soviet calendar, instituted after the Bolshevik Revolution.
Moscow police said more than 100,000 attended the May 1 parade.
The procession, organized by trade unions, was led by Moscow Mayor Sergei Sobyanin.
Crowds carrying colorful balloons and banners as well as flowers and Russian and Soviet flags marched through Red Square.
The parade was perceived by some as a celebration of Russia’s actions in neighboring Ukraine.
Some participants raised banners reading, “Let’s go to Crimea for vacation,” and “Putin is right,” in an apparent reference to President Vladimir Putin’s decision to annex the Crimean Peninsula from Ukraine after an invasion and hasty referendum last month.
The festivities come amid escalating tensions between Moscow and Kyiv as pro-Russian separatists occupied police and administration buildings in more than a dozen cities in eastern Ukraine.
The Interfax news agency reported some 2 million people attended similar marches in other Russian cities.
Large parades were also held in Crimea. Russian news agencies, quoting the new Russian authorities in the annexed region, said some 100,000 people took part in a May Day demonstration in Simferopol and tens of thousands marched through the city of Sevastopol.
Those figures could not be independently verified.
Russian media reports say Putin is due to visit Crimea next week for the Victory Day celebrations on May 9, when Russia marks the defeat of Nazi Germany.