Jammeh, 41, has led the tiny West African country since he came to power in a bloodless coup 12 years ago.
Widely tipped to be re-elected, Jammeh has said neither elections nor coup attempts can unseat him because God has sent him to rule the country.
He is being taken on by a prominent human rights lawyer Ousainou Darboe, 58, who has trailed behind him in the two previous polls, and Halifa Sallah, 53, a parliament member and sociologist.
Polling stations opened at 7am (0700 GMT) on Friday and will close at 4pm in Africa's smallest mainland country where about 305 observers, including 173 foreign ones, have deployed.
Full results should be announced early on Saturday, according to the country's independent electoral commission.
Gambia uses a unique voting system involving dropping of a marble ballot token down a narrow tube of a steel drum painted in the colour of a chosen candidate, striking a bell heard outside the polling booth.
The system introduced by the colonial ruler Britain in 1960, according to the electoral commission, provides "greater security against election fraud". The bell sound ensures no multiple voting and bicycles are barred from polling stations as their bells might cause confusion.
The system is also regarded as accommodating for illiterate voters.
The head of the independent electoral commission said the campaign has been more peaceful compared to previous ones.
Jammeh has been telling supporters during campaign appearances that neither coups nor elections can remove him from power and that those not voting for him are choosing regression.
"This is a way of creating uncertainty and fear in the electorate. Such statements discourage people from voting and that is not in conformity with free and fair elections," said opposition leader Sallah.
It is the third presidential poll organised by Jammeh since he seized power in a coup in 1994, toppling the country's first president. Legislative elections are scheduled for December.
In September 1996 Jammeh won election by 56 per cent and in October 2001, swept to victory with 53 per cent.