More than 350 candidates from 12 parties and one coalition are running for 76 seats in the State Great Khural, or parliament, election officials have said.
The two major parties in the race, the Mongolian People's Revolutionary Party (MPRP) and the Democratic Party, have both pledge to share more of the country's natural wealth with the public.
However they disagree over whether the government or private sector should hold a majority stake of the country's mineral deposits.
Both parties have attempted to win votes by promising cash handouts.
A poll showed the ruling MPRP with a slight lead over its rival, but if neither win a majority in the 76-seat parliament and are left to form a coalition, the smaller parties on the ballot could be the real power-brokers.
Tungalag Tsedendorj, a 58-year-old retiree, said she had voted in every election since the 1990s but that this election had particular significance.
"Mongolia must now decide how to develop in the future," she said.
"I'm voting with the hope that we will receive the 'Gift of the Motherland' in the future. This dividend will really help us.''
Voting will close on Sunday evening local time and the first results are expected on Monday morning.
Parliamentary elections are held every four years in Mongolia, where more than 1.5 million registered voters out of the population of 2.6 million are eligible to vote.
It is the fifth parliamentary election since 1990, when Mongolia stopped being a satellite state of the Soviet Union.