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Residents gathered around its martyrs monument, some holding Kurdish flags.
Others paraded photographs of some of the estimated 5,000 people who were killed, most of them women and children, in what is now thought to have been the worst gas attack ever carried out against civilians.
Parked in front of the monument was a pick-up truck that residents say was hit by a rocket during the 1988 attack. Next to it were the remains of the rocket they say hit it.
Leaflets were scattered around Halabja reading: "From Tears to Hope," and: "From Hatred to Forgiveness".
With Saddam Hussein's eight-year war with neighbouring Iran coming to a close in 1988, Kurdish peshmerga rebels seized control of Halabja in the mountains near the border.
The Iraqi army then shelled the town, forcing out the rebels. For five hours on the morning of March 16, Iraqi fighter planes released a deadly cocktail of mustard gas and the nerve agents Tabun, Sarin and VX.
Many residents are still dealing with the after-effects of the brutal attack.