Some in the crowd camped overnight to nab a prime stop by the palace for the 30-minute parade featuring the emperor and his wife Empress Masako.
The parade was originally scheduled for October 22 but was postponed out of respect for those impacted by Typhoon Hagibis in eastern Japan.
The royal couple emerged from the palace moments before 3: 00 pm (0600 GMT), with the Emperor wearing formal Western clothing and the Empress dressed in a long cream gown and jacket, wearing a tiara passed down by her predecessor.
Tight security will be in place, with police conducting ID checks at buildings along with the route and baggage inspections at dozens of locations from the morning.
Emperor Naruhito ascended to the throne on May 1 when Emperor Akihito became the first Japanese monarch to abdicate it in about 200 years. After the parade, it will be put on display in Tokyo and Kyoto. "We're at Disneyland levels of crowding", a policeman said on a loudspeaker minutes before the parade began, "The security check won't finish in time for you to see the parade".
"I am hoping from the bottom of my heart that victims can return to a life in which they feel secure as soon as possible", the emperor said. "And Empress Masako is someone who can be a role model for modern women with full-time jobs".More news: Whistleblower Q&A Offer Still Awaiting An Official 'No' From Republicans
More news: Alibaba says Singles' Day sales hit 91.2 billion yuan in first hour
More news: Pulisic keeps up scoring run for Chelsea in win over Palace
The emperor officially proclaimed his enthronement on October 22 before some 2,000 Japanese and foreign dignitaries in the "Sokuirei Seiden no gi" ceremony, equivalent to a coronation.
Despite concerns about her health and skepticism over her ability to fulfill even part of hugely popular former Empress Michiko's work, Masako has been seen in good health and in smiles when carrying out her official duties recently.
Born into a diplomatic family and educated at Harvard, Empress Masako left behind a promising diplomatic career to marry into the royal family.
There are expectations that Naruhito - who is Japan's first emperor with a college degree and who studied overseas - and his Harvard-educated wife will internationalize the imperial household.
Sunday's event was the first since one was held for Naruhito and Masako's marriage in June 1993, just three years after his parents marked their enthronement with a parade. It was a stark contrast from last month's enthronement ceremony, in which both wore traditional robes.
The parade comes a day after a national festival to celebrate the enthronement with dancers and pop stars offering performances.