Police say 540,000 people rallied in Barcelona, the capital of the region in north-east Spain, while the rest gathered in four other Catalan towns.
But numbers were down sharply compared with last year's event, when 1.4 million rallied in Barcelona alone.
Spain has consistently blocked attempts to hold a referendum on secession.
Catalan regional president Carles Puigdemont had urged support for "converting Catalonia into an independent state".
Divisions have also emerged between the separatist movement's main political grouping in the Catalan parliament, the Together for Yes coalition, and its radical leftwing ally, the CUP.
Mr Puigdemont, who took power in January, faces a confidence vote on 28 September.
He advocates a negotiated withdrawal from Spain.
When Catalan nationalists held an unofficial referendum on independence in November 2014, 80% of those who voted backed independence.
Sunday is the "Diada", Catalonia's national day. It commemorates the moment in 1714 when Barcelona fell to troops loyal to Spain's King Philip V during the War of the Spanish Succession.
"We have to move towards the final outcome," 58-year-old office clerk Xavier Borras, who planned to attend the rally in Barcelona with a friend, told AFP news agency.
"We can't wait any longer."
Spain's leading parties, deadlocked in their efforts to form a new government after two inconclusive general elections since December, have shown little sympathy for Catalan grievances.
The region of 7.5 million people makes up 16% of Spain's population and accounts for almost 19% of national GDP.
Some 800,000 people have turned out in Barcelona and other towns in Catalonia on a day of rallies by nationalists wishing to break with Spain.