This year's demonstration is dedicated to unrecognised Bedouin villages in the southern Negev desert.
Organisers say 80,000 people live with no basic amenities in communities all over the Negev because the government does not recognise them as residential.
Israel's 1.2 million Arab minority has marked Land Day since 1976.
That was when the security forces killed six Arabs protesting against a government decision to expropriate land in the Galilee region.
Wednesday's main Land Day rally took place in the unrecognised Negev village of Abu Tlul, home to 3,000 Bedouin.
"Living conditions in these villages are worse than in Palestinian refugee camps and we're talking about Israeli citizens. They don't have water or electricity," said Taleb al-Sana, an Arab member of the Israeli parliament.
Parades and commemorations were also due to take place in the northern Galilee region and the Israeli-occupied West Bank.
Wednesday's events were also to protest against house demolitions and proposals that the Arab minority should do national service in order to receive all their rights.
Organisers say demolition orders are hanging over 50,000 Arab homes in Israel, including 30,000 in the Negev.