The day began with Muslims, attired in their best, offering prayers at Eidgahs (open grounds) and mosques.
Eid-ul-Azha, also known as Bakrid, is one of the most important festivals in the Muslim calendar.
Film star Mammootty was the cynosure of all eyes at an Eidgah in Kochi while the biggest Eidgah was in Kozhikode, where an estimated 10,000 people offered prayers.
Districts like Malappuram, Kozhikode, Kochi and the capital city of Thiruvananthapuram witnessed increased activities among the Muslims to celebrate the Eid.
After the prayers, Muslims sacrificed goats and other "halal" animals commemorating the great sacrifice of Prophet Ibrahim. The meat of the sacrificed animals is distributed among neighbours, relatives and the poor.
Since Bakrid this year fell on a Sunday, the state government declared Monday as a public holiday.
Muslims constitute about 22 percent of the state's 3.30 crore population.