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The rally, organised by the Campaign for Nuclear Disarmament (CND), took more than five hours to get through the city centre causing massive traffic disruption.
CND officials said they were delighted with the response and had never seen such a crowd.
The marchers, made up mainly of young people, created a festival atmosphere in Hyde Park as speakers took to the stage to address the crowd.
Tony Benn MP said it was time to stand up to Americans and close their UK missile bases.
"President Reagan cannot ignore us because President Reagan does not own Britain and Europe. This is our continent and we will shape it for ourselves" he said.
Labour Party leader Michael Foot added: "In this autumn of 1981 we stand at the most dangerous moment of all, ever since these nuclear weapons have come into operation and that is why it has been so necessary to re-establish this campaign."
He said that people now rejected the "insanity of nuclear weapons".
Greenham Common in Berkshire is set to be the very first base in Europe to receive its first flight of 16 missiles when they arrive in late 1983.
The CND declared the turn out proof that the movement is as popular as ever and has regained its momentum. It is thought to be the biggest crowd ever for such an event.
Rallies have also taken place in Rome where marchers chanted anti-nuclear messages and flew missile shaped balloons and banners declaring nuclear missiles to be 'the end of humanity'.
In Context
The Campaign for Nuclear Disarmament (CND) was at the peak of its popularity and influence during the mid-1980s.
It was founded in 1958 at the height of the Cold War and began to stage annual marches attended by thousands.
The organisation went into decline during a thaw in relations between the superpowers in the 1970s but regained its popularity during the 1980s with a series of marches to protest against cruise missiles.
In 1998 CND had approximately 40,000 members, down from a high of 100,000.
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