Police said in a tweet that a PEGIDA supporter was attacked by unidentified assailants, leaving him seriously injured.
Carrying placards with images such as a picture of burqa-wearing women with a big cross over it, or slogans like "Go Merkel: you give the Judas kiss", PEGIDA supporters gathered in downtown Dresden, the birthplace of the movement, chanting "resistance, resistance!".
"This has been a year of PEGIDA, a year of demonstrations. We are here. PEGIDA works," said co-founder of the movement Lutz Bachmann to cheers.
Independent estimates gave a smaller turnout, with local newspaper Saechische Zeitung saying 20,000 were present, while Durchgezaehlt, a university group specialising in rally estimates, said around 19,000 had attended the rally.
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One of them, Hannelore, told AFP: "We are here for our children and grandchildren. We are proud to be here and that many people are here. We are glad that people have the courage to speak out."
PEGIDA -- short for "Patriotic Europeans Against the Islamisation of the Occident" -- started life as a xenophobic Facebook group centred around Bachmann, 42.
At its peak, the movement attracted 25,000 at its weekly gatherings in January, before interest began to wane, not least because of Bachmann's online racist slurs and the surfacing of "selfies" in which he sported a Hitler moustache.
But PEGIDA has seen some revival in recent weeks as Germany gears up to welcome up to a million asylum seekers this year.
"Orban Yes! Hungary shows how it works," read one sign held up by a demonstrator, while the Hungarian flag could also be seen in the crowd.
Nevertheless, counter-protesters also sought to make their voices heard on Monday as they turned up in their thousands in Dresden -- Durchgezaehlt estimated 14,000.