The May 1 rally filled Havana's Revolution Square and other spots across the country in a sea of red, white and blue national flags and giant portraits of Fidel Castro.
Traditionally a day of protest and defense of workers' rights worldwide, the May Day rally in communist Cuba is unusual in being a march in support of the authorities.
The government still employs 70 per cent of the five million workers on the island of 11 million people.
Raul Castro has been cautiously opening up Cuba's state- run economy and strengthening its foreign relations -- notably by re-establishing diplomatic ties with the United States.
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But today's parade had the feel of the end of an era.
Raul Castro attended in his trademark green military cap and uniform, but did not make a speech.
It is not clear who will take his place next year as president.
Most rumours suggest it will be Miguel Diaz-Canel, 56, vice-president of the State Council.
He is expected to retain considerable influence since he will remain leader of the governing Communist Party.
"The conditions for continuity are there," said retiree Elier Dominguez, 68.
"There is only one party."
Despite ministerial experience and party credentials, Diaz-Canel is seen as lacking a support base in the military.
"There is very high uncertainty about 2018," said Pavel Vidal, a former official of Cuba's central bank and an academic at Colombia's Javeriana University.
"One could expect a process of continuity" of Raul Castro's reforms, he added, "but not at the same speed."
Today's parade in Havana voiced support for Venezuela's leftist government which is facing violent opposition protests.
Venezuela sells cut-price oil to its leftist allies in Havana. Cuba is currently in recession, dragged down by its ally's economic crisis.
Analyst Andrew Otazo of Washington-based Cuba Study Group told AFP that Cuba has started looking to other oil exporters in case the Venezuelan government collapses.