Police said more than 1,000 people paraded through the Latvian capital's Old Town amid a heavy security presence.
Jewish groups, Moscow and many in Latvia's large ethnic Russian minority see the parade as glorifying Nazism because the Latvian Legion, founded in 1943, was commanded by the Waffen-SS, the Nazi party's elite police force.
A quarter of Latvia's two million people identify themselves as Russian.
Efraim Zuroff of Jerusalem's Nazi-hunting Simon Wiesenthal Center told AFP: "It's a very sad day to see these people marching and to see Waffen-SS troops glorified as freedom fighters.
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Latvian Legion veterans have marched in Riga every March 16 since Soviet rule ended in 1991. The date marks the key 1944 battle in which the force ultimately failed to repel an advance by Moscow, leading to nearly half a century of communist occupation.
Veterans insist they were trying to defend their homeland against Soviet occupation.
"I've faced death -- in the Legion and when I was sent to Norilsk (a Soviet prison camp). Since returning, I see every day as a gift to be appreciated," Eduards Zirdzins, 95, told the Latvijas Avize newspaper.
Germany drove out the Red Army when it reneged on the pact and invaded the Soviet Union in 1941.
Some Latvians hailed the Nazis as liberators despite killing 70,000 of the country's 85,000 Jews with assistance from local collaborators.
The Soviets recaptured Riga in October 1944 and ruled the country until the USSR collapsed in 1991.