Braving rains, Muslims in Hyderabad and in other cities and towns of Telangana and in neighbouring Andhra Pradesh offered Eid prayers.
After the prayers, Muslims sacrificed goats or cattle commemorating the great sacrifice of Prophet Ibrahim.
The day began with Muslims, attired in their best, offering Eid prayers. The early morning rains forced devotees at many places to offer namaz in mosques instead of Eidgahs or open grounds.
Tens of thousands offered prayers in Hyderabad and nine other districts of Telangana and all 13 districts of the neighbouring Andhra Pradesh.
During their speeches before namaz, the imams exhorted Muslims to imbibe the spirit of sacrifice and follow Prophet Ibrahim, who offered to sacrifice his son Prophet Ismail to please Allah. The Almighty replaced Ismail with a sheep just as Ibrahim was about to sacrifice him.
Also known as Bakr-id or Eid-e-Qurban, it is the second major festival of Muslims.
The meat of the sacrificed animal is distributed equally in three parts. The person making the sacrifice keeps one part for his family while the other two parts are distributed among relatives and the poor.
The streets of the Muslim-majority old city of Hyderabad wore a festive look while butchers, coming from other districts, did brisk business.
Hectic activity was seen in many parts of the city as the sale of goats continued throughout the night. The goats and sheep were sold for Rs 6,000 to Rs 8,000 each.
The sacrifice can be made during the three-day celebrations, with Tuesday being the first day.
The biggest congregation in Hyderabad was held at the historic Mir Alam Eidgah where thousands of people offered prayers.
The historic Mecca Masjid, Madannapet Eidgah, Hockey Ground Masab Tank and Military Ground Mehdipatnam witnessed other big congregations. Prayers were also held at hundreds of mosques in the city.
Tight security arrangements were made in the communally sensitive old city of Hyderabad in view of the ongoing Ganesh festivities, which will conclude with the annual immersion processions on Thursday.
Police Commissioner Mahender Reddy visited the old city to review the security arrangements.
The Eid was also celebrated in Nizamabad, Karimnagar, Nalgonda, Mahabubnagar, Adilabad, Warangal and other towns of Telangana.
In Andhra Pradesh, huge Eid congregations were seen in Vijayawada, Guntur, Kurnool, Kadapa, Anantapur and other major towns of the state.
Telangana Chief Minister K. Chandrasekhar Rao, Andhra Pradesh Chief Minister N. Chandrababu Naidu and Governor of the two states E.S.L. Narasimha Rao greeted people on the occasion of the Eid.