Children and youth burst crackers and lit other fireworks in Hyderabad and other parts of the state as women lit traditional 'Deepams' (diyas) at homes in the evening.
People exchanged sweets on the occasion and wished each other, while SMS and internet were used to convey Deepavali greetings.
Devotees worshipped Lord Sri Krishna and Goddess Lakshmi at homes, while temples were thronged all across the state.
The festival is celebrated in Andhra Pradesh to mark the killing of demon Narakasura by Lord Sri Krishna.
Those fighting against the bifurcation of Andhra Pradesh also used the occasion to highlight their cause at some places.