Spaniards angered by increasingly grim economic prospects and unemployment hitting one out of every four citizens turned out in droves in the nation's largest cities.
The protest marked the one-year anniversary of a spontaneous movement that inspired similar anti-authority demonstrations across the world.
The Interior Ministry said 72,000 people marched against the government's tough austerity measures in Madrid, Barcelona and six other cities, but protesters claimed the turnout was much higher.
The epicentre of the protest was Madrid, where at least 30,000 people flooded into the central Puerta del Sol plaza on Saturday night, vowing to stay put for three days.
Authorities warned they would not allow anyone to camp out overnight as protesters did last year, but the demonstrators stayed put after a midnight deadline to leave and more than 2,000 riot police on duty made no immediate effort to force them out.
"I'm here to defend the rights that we're losing and for the young people who have it so tough," said 57-year-old teacher Roberto Alonso. "They're better educated than ever. But they don't have work. They don't have anything. They're behind and they'll stay that way."
At least 22,000 people demonstrated in Barcelona, Spain's second largest city. Marches were also held in Bilbao, Malaga and Seville, and sympathisers from other countries held protests across Europe.
The protests began on May 15 last year and drew hundreds of thousands of people calling themselves the Indignant Movement. The demonstrations spread across Spain and Europe as anti-austerity sentiment grew.
Spain is in dire economic straits, prompting fears it may need a bailout similar to those requested by Greece, Ireland and Portugal. It is in recession, and unemployment stands at almost 25% - the highest among the 17 countries using the euro. One in two Spaniards under 25 are out of work.
Prime minister Mariano Rajoy's conservative government has enacted deep spending cuts to reduce the national debt, but many people blame those measures for deepening families' financial plight.