Demonstrators sang Christmas carols and listened to speeches about immigrants and asylum seekers.
Weekly rallies by a group called Patriotic Europeans against the Islamisation of the West, or Pegida, began in October.
Several counter-demonstrations were being held on Monday.
Chancellor Angela Merkel and other senior politicians have spoken out against the Pegida rallies.

Fatbergs are caused when cooking fat, oil and grease are poured down drains and become tangled up with waste items like baby wipes and sanitary products.
The blockage is in a sewer beneath the Dublin Road in Belfast.
Northern Ireland Water said crews have already removed "a couple of hundred tonnes" of grease from the sewer.
The firm said cooking fat is a "significant" problem in the area as it houses several fast food outlets.
The company's networks sewerage manager, Gavin McCready, warned restaurant owners that fatbergs could have some very unpleasant side-effects.
"These fat blockages can not only result in out-of-sewer flooding, but odour problems and the risk of rat infestations both near and beyond your premises."
Mr McCready also said it was adding unnecessary costs to the businesses and the public purse.
"While most businesses use grease traps and bin their waste correctly, those that don't are contributing to a massive fatberg in the sewers around the area.
"Our team has been on the site, working over a number of Sunday mornings, clearing the fat that has solidified.
"This is labour intensive work that can only be done early in the morning before the traffic builds up."
In the last two years NI Water has spent over Â£5m clearing blockages from the sewer system.
The company said up to 80% of blockages were caused by fat, oil and grease and other inappropriate items being flushed into drains.
The items get stuck together and form a ball, which can build up over time to block sewer pipes.
Earlier this month, NI Water spent five hours clearing a fatberg from a drain in Newry, County Down.
The blockage was at Buttercrane Quay in the city centre.
In August 2013, Britain's biggest ever fatberg was removed from a London sewer.
Thames Water said the lump found under a street in Kingston upon Thames was the size of a bus.

Alfio Anthony Granata pleaded guilty to multiple rapes, threats to kill, and intentionally causing serious injury.
He held the backpacker in his Melbourne hotel room in 2012 after they had sex and took drugs with his partner.
She was freed only when she tried to kill herself, prompting Granata and his partner to call emergency services.
A judge on Monday described Granata's actions as "akin to torture", and that he had "degraded and humiliated" his 21-year-old victim, who has not been named.
Granata and his partner, Jennifer Peaston, had met the backpacker at a party in November 2012 and invited her to their hotel room.
The backpacker was forced to live in the shower. Granata, with the help of Peaston, beat the woman with various objects including a meat tenderiser and rolling pin, and performed bizarre rituals on her.
The judge said the woman was left a "reclusive and frightened" individual.
Earlier this year, a judge found that Peaston was traumatised and had also been a victim of abuse by Granata. She avoided jail and was given a good behaviour bond without conviction.
A record 17,500 people have turned out for the latest "anti-Islamisation" rally in the German city of Dresden, according to police estimates.
[NEXT_CONCEPT]
An operation to remove a "massive fatberg" from a Belfast sewer has been ongoing for the last six Sundays and is expected to take several more.
[NEXT_CONCEPT]
An Australian man who imprisoned a Dutch backpacker in a hotel room for six weeks and repeatedly raped and beat her has been jailed for 17 years.