The protesters, who arrived in buses organised by mosques and conservative Islamic groups, urged parliament to immediately pass the bill, that in its current form would ban kissing in public - as well as erotic poetry, dancing, drawing, writing, photos and film.
Organisers said one million people would attend the demonstration. Turnout appeared far less than that, perhaps 25,000, but it was still one of the largest shows of force by conservative Islam in recent years.
Reuters said supporters of the Islamic Defenders Front and Hizbut Tahrir Indonesia gathered outside the parliament building with banners reading "Pornography can destroy nation's morality" and "Indonesia should be civilised".
Participants included many women in traditional Islamic headscarves and toddlers.
Elshinta Radio reported another 5,000 people, also including women, rallied in Semarang in Central Java.
"Pornography is part of the culture of the West and the unbelievers," said demonstrator Choirul Hassan. "They are exporting this to Indonesia to destroy a whole generation of Muslim youth. They must be stopped."
Some demonstrators carried banners calling for the imposition of Islamic law in the country, which is home to some 190 million Muslims - more than any other country in the world - but also has significant Christian, Hindu and Buddhist minorities.
"Ban pornography and stop the sex industry," they shouted. "Down with liberalism and secularism," read one banner in support of the bill, which has become a rallying call for the country's growing hardline fringe.
The bill, which was originally drafted in 1999 following the downfall of ex-dictator Suharto, is facing opposition from nationalist lawmakers, who form a majority in the house, and is unlikely to pass as in its current form.
Those opposed to the bill include the country's minority faiths, liberal Muslim groups, artists and several outlying regions which fear their traditional dances and culture may be criminalised.