"Kirkuk, Kirkuk, heart of Kurdistan," they chanted in the city centre. "We demand federalism for Kurdistan".
It was the biggest demonstration in Kirkuk, 300 kilometres north of Baghdad, since the Baath regime fell on 9 April.
Kirkuk lies south of the three provinces ruled by Kurdish rebel factions in defiance of Saddam Hussein and is populated with Arabs and Turkmen as well as Kurds.
Protesters waved the red white and green Kurdish flag, which bears a yellow sun in the middle, but no Iraqi flags were on show.
A giant US flag was also unfurled.
The demonstration was split along party lines between the two main former rebel factions - the Patriotic Union of Kurdistan and the Kurdistan Democratic Party.
Meanwhile, Masud Barzani, a prominent Kurdish member of Iraq's interim Governing Council, has said the Kurds are claiming the Kirkuk region as a historical right and not for its oil riches.
"The Kurds are not claiming Kirkuk because the region is rich in oil ... but because its towns and villages are important in Kurdish history and are situated within the geographical borders and administrations of Kurdistan"
Kurdish member of Iraq Governing Council
"The Kurds are not claiming Kirkuk because the region is rich in oil... but because its towns and villages are important in Kurdish history and are situated within the geographical borders and administrations of Kurdistan," Barzani told Al-Takhi newspaper, mouthpiece of the Kurdistan Democratic Party (KDP), which he heads.
"The Kurdish people consider a federal system as the best solution to our problem, and any future government should not repeat the mistakes committed by former Iraqi governments and should not ignore the will of the Kurdish people," he said.
"After 12 years of autonomy, the Kurds will never accept less than the areas they already control and hope for other regions of Kurdistan, which before the liberation of Iraq was subjected to demographic changes," added Barzani.
Kurdish representatives on the US-installed council have
submitted a bill to establish a federal Iraq, without waiting for a constitutional convention promised for 2005.
All five Kurdish members of the council are backing the bill, including the heads of the two main former rebel factions, Jalal Talabani and Barzani, according to Bakhtiar Amin, assistant to Mahmud Uthman, another of the bill's five proponents.