Prime Minister Jan Peter Balkenende's government secured parliamentary backing last year for the new ID law amid concerns about crime, public disorder and potential attacks from activists opposed to the presence of Dutch troops in Iraq.
Concerns about crime have dominated Dutch politics since the rise of the late anti-immigration populist Pim Fortuyn in 2002.
The 11 September 2001 attacks in the United States and last year's Madrid train bombings have added to worries about security.
Many European countries already have some form of identity card scheme, but the move has drawn fire from critics in the
Netherlands, a country renowned for its liberal attitude to
prostitution, cannabis, euthanasia and gay marriage.
The law, which came into effect on Saturday, makes it mandatory for people from the age of 14 to produce an identity card when asked to by police.
"People involved in crime are getting younger and younger, so I've no problem with the age limit," said 33-year-old Dutchman Ramon Geskus.
"For privacy reasons I think it's not a good thing but it's becoming a necessity to maintain order."
He added: "I just hope the police don't misuse it just to harass Moroccans or Turks and other people."
"I just hope the police don't misuse it just to harass Moroccans or Turks and other people"
Those who fail to produce a valid ID card - including schoolchildren and pensioners - could face a fine of up to 2250 euros ($3061) as part of a law-and-order drive by the centre-right coalition.
The law change, approved by the upper house of parliament in June, tightens existing rules that demand people produce proof of identity in limited circumstances, such as on public transport or at soccer games, the government says.
Passports, driving licences, a national identity card or residence permits will be accepted as valid ID.
Police are only to ask for ID as part of regular duties - such as investigating an incident - and are not to carry out separate ID checks.