Trump, who arrived in Tokyo, is set to visit the South from Tuesday to Wednesday as part of his first Asian trip as head of state that also includes Vietnam, China and the Philippines.
He is scheduled to hold a summit with President Moon Jae-In and visit a US military base, with all eyes on his message to the North and its leader Kim Jong-Un.
Tensions flared after Pyongyang staged a sixth atomic test in September and test-launched multiple missiles capable of reaching the US mainland, while Trump and Kim have traded colourful personal attacks.
"We oppose war! Negotiate for peace!" the protesters chanted in central Seoul, waving banners and balloons emblazoned "Peace, not war" and "We want peace".
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Many protesters slammed both Trump and Kim for heightening the risk of conflict.
"Trump and Kim... are using the current military standoff for their own political gain, while we South Koreans are trembling with fear of war!" one activist said on stage.
"My heart stirs at every single word Trump says about North Korea," she said.
Organisers estimated the number of protesters at around 2,000.
The latest standoff between Trump and Kim has raised concern among South Koreans, who have over decades grown indifferent to regular threats of attack from Pyongyang.
But some Trump advisers say US military options are limited because any armed conflict on the peninsula would be expected to cause huge casualties.
Seoul is home to 10 million people and only about 50 kilometres from the heavily-fortified border, within range of Pyongyang's artillery.