Last year's march saw huge numbers as discontent surged over restrictions by Beijing on how Hong Kong chooses its next leader, with organisers saying a record 510,000 attended.
But after more than two months of street rallies at the end of last year and further protests in the lead-up to the vote on the controversial election reform package last month, fewer people are likely to turn out today as campaigners work out their next step.
It was voted down by pro-democracy lawmakers in June.
"Everyone anticipates a lower turnout than last year... because the momentum has slowed down after the veto over political reform," said Johnson Yeung of the Civil Human Rights Front, the march organisers.
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But Yeung insisted numbers were not important and that this year's march was a chance to reshape the democracy movement's message, which has splintered since the end of the mass street rallies in December.
This year is the 18th anniversary of the handover of Hong Kong to China by Britain in 1997 and the annual march is traditionally an outpouring of protest directed at both China's Communist Government and the local leadership.
It comes at a time when Hong Kong is deeply polarised with fragmentation in both the pro-democracy and pro-Beijing camps.
In a speech today at a flag-raising ceremony to mark the handover anniversary, current leader Leung Chun-ying criticised lawmakers who had rejected the government's reform package.
"As the experience of some European democracies shows, democratic systems and procedures are no panacea for economic and livelihood issues," he said.
A small group of protesters near the ceremony carried a cardboard coffin marked "Grave of Hong Kong - Date of Death: 1997" and burned a portrait of Leung.
One was detained amid reports that he had burned a Hong Kong flag, which is an offence in the city, but police were unable to confirm the reason for his arrest.