On the same day, President Bush told the nation there will be "more days of sacrifice and struggle" in Iraq.
Organizers claimed 300,000 people turned out for the protest, but the New York Police Department told CBSNews.com the actual number was much lower. The police would not release an estimate for the crowd.
One of the many signs in the crowd read "End this war, bring the troops home." Another read "Veterans for Peace."
One woman who marched says she "had a lot of anger" and has to do something. Marjori Ramos of Staten Island said, "We've been lied to."
The demonstrators stretched for about ten city blocks. There were no arrests reported.
Rev. Jesse Jackson, actress Susan Sarandon, and Cindy Sheehan, whose 24-year-old son died in Iraq, were among the marchers.
One group marched under the banner "Veterans for Peace," while other marchers came from as far off as Maryland and Vermont.
"We are here today because the war is illegal, immoral and unethical," said the Rev. Al Sharpton. "We must bring the troops home."
"The Bush Administration hopes to diffuse pressure at home and in Iraq to end its occupation by bringing a portion of the troops home (maybe)," organizer Leslie Cagan said in a statement before the rally. "But withdrawing some troops is completely unacceptable."
Cagan also said marchers are opposed to any military action against Iran.
The New York Police Department closed streets in lower Manhattan in anticipation of the demonstration.
The U.S. military said Friday that at least 67 U.S. troops have died in Iraq in April, and that number climbed to 70 by Saturday.
Although that figure is well below some of the bloodiest months of the Iraq conflict, it marks a sharp increase over March, when 31 American service members were killed. January's death toll stood at 62 and February's at 55. In December 2005, 68 Americans died.
President Bush warned in his weekly radio address Saturday of tough fighting to come and "more days of sacrifice and struggle" in Iraq.
"The enemy is resorting to desperate acts of violence because they know the establishment of democracy in Iraq will be a double defeat for them," Mr. Bush said.
"There will be more tough fighting ahead in Iraq and more days of sacrifice and struggle," he cautioned. "Yet, the enemies of freedom have suffered a real blow in recent days, and we have taken great strides on the march to victory."
At least 2,397 members of the U.S. military have died since the Iraq war began in March 2003, according to the AP count.
In other developments: