Kumar is currently recovering in a Mumbai hospital where he was admitted on Tuesday following swelling in his right leg.
The celebration was organised by Cultural Heritage Council, an NGO, at the Peshawar Press Club where fans and political activists showed up and cut a cake.
Organiser of the event, Shakeel Waheedullah, said that Kumar was born in the Hindko-speaking Awan family at Mohallah Khudadad near Qissa Khwani Bazaar of the provincial metropolis and spent 12 years of his childhood in the city.
He said that the people of both the countries loved each other.
Renowned writer and artist Mustansar Hussain Tarar also paid tribute to Dilip Kumar.
The council has been celebrating Kumar's birthday for the last eight years.