Polls had opened at 8am (0430 GMT), with state radio announcing that "today, the Iranian nation once again will show its political maturity".
Ahead of the vote, the Guardian Council, an unelected body of clerics and jurists, disqualified around 1,700 candidates, mostly reformists.
Those barred from running were judged "insufficiently loyal to Islam or the revolution".
The Reformists acknowledged ahead of the vote that that the disqualifications meant that they could contest just half the available seats, leaving a clear run for conservatives to retain control of the 290-seat chamber.
Ayatollah Ali Khamenei, Iran's supreme leader, pledged his support for the conservatives.
In a speech on Wednesday, he called on voters to back candidates who are opposed to the US and "whose loyalties are to Islam and justice".
The United States, which has been at odds with Iran since the Islamic revolution in 1979, criticised the electoral process.
"In essence the results are cooked ... in the sense that the Iranian people were not able to vote for a full range of people," Sean McCormack, US state department spokesman, said.
The disqualifications of candidates divided reform supporters.
Some, such as Hadi Rezaei, a computer technician living in Tehran and a supporter of democratic reforms decided to boycott the vote.
"We can't bring deep democratic changes within the ruling establishment through the ballot box," he said.
"Once, I used to vote for reformers but it didn't work. The Guardian Council has already decided the elections."
But reform leaders pressed their backers to go to the polls, hoping that with a large turnout they can at least build a strong minority in parliament, rather than the handful of seats they now have.
"It is not a fair or free election but I will still vote," Ahmad Moshkelati, who writes for Mardomsalari (Democracy), a pro-reform newspaper, said.
"Boycotting the vote only strengthens hardliners and further weakens reformers, he said.
Initial results are expected to come in by late Saturday or Sunday. Officials said that the final results would not be announced until five days after the voting.
Senior officials and state media have made every effort to encourage a massive turnout as a display of national unity.
State television has been repeatedly playing patriotic music and pictures of long queues of people voting in past elections, as well as running interviews with ordinary and famous Iranians emphasising the importance of voting.
|Young Iranians are concerned about |
the economy and unemployment [AFP]
The elections were considered as a 'litmus test' for Ahmadinejad, who has been accused of failing to control inflation and increasing tensions over Iran's nuclear ambitions, ahead of presidential elections in 2009.
Inflation in Iran has increased by 20 per cent and almost one in 10 people remain unemployed.