Venetians of all ages took part in the "Venexodus" demonstration, clutching signs bearing slogans such as "Farewell, Venice," and "I won't go, I will stay and resist," as well as suitcases to symbolise the constant departures.
A man dressed in the historic costume of a doge -- the leaders of Venice for more than a thousand years -- boarded a gondola for a symbolic farewell trip.
More than 60,000 tourists arrive in Italy's Adriatic jewel each day -- a tally that outstrips the number of full-time residents.
"Venice is losing 1,000 residents each year. It now has less than 55,000 people, compared to 100,000 40 years ago -- the danger is very great," said Matteo Secchi, head of the association venessia.com which organised the rally.
Secchi drew a comparison with Pompeii -- the preserved Roman town that the volcano Vesuvius destroyed in the year 79.
"We are turning into Pompei, a town which people come to visit and say it's magnificent, but no one lives there," Secchi told AFP. "Venetians are not against tourists. It's right for tourists to visit Venice, but it is also right for its inhabitants to be able to be live there. The challenge is to reconcile these two different worlds."
Housing is one of Venetians' biggest complaints -- costs have rocketed as private owners rent out apartments to tourists for short-term lets. There are also gripes over jobs.
"Many of my friends have had to leave the city, not just because of housing problems but also because the only work here is in tourism," said Marco Vidal, a 35-year-old Venetian.
"If you have training in a different field, you are obliged to leave. The local authorities gave up years ago the idea of encouraging people to live in Venice, creating jobs and making it a city with a future, rather than an amusement park."
Activists have been campaigning since the last decade for efforts to roll back the exodus.
But the lure of the Grand Canal, St. Mark's Square and the Bridge of Sighs for foreign visitors remains unquenched, as the arrival of giant cruise ships testifies.
Today, with an annual influx of some 20 million people, the city's narrow streets and canal bridges can get extremely crowded.
Shops serving local people, such as those selling groceries or hardware, have been supplanted by souvenir stores.
In September a thousand young Venetians, responding to an activist group called Generation 90, gathered with empty shopping bags to draw attention to the shortage of ordinary shopping facilities.
Proposals for easing the exodus are many, although campaigners despair at whether these will ever be implemented. Generation 90 spokesman Marco Caberlotto said it was time to set a daily limit on numbers gaining access to St. Mark's Square, with places reserved in advance at a small fee.
Noting that 40,000 people commute to Venice each day for work, he also pushed for tax changes to encourage landlords to rent their properties to locals rather than to tourists for overnight stays.
Secchi said another priority was to rent out 2,000 apartments that are owned by the authorities but lie empty because of chronic bureaucratic problems.
The city hall told AFP it had set up a consultation process for finding "the right balance" between residents and tourists. Initiatives include giving Venetians priority to the "vaporetto" ferries and local authorities are looking at ways of stimulating jobs in the non-tourism sector and encouraging families to settle.
After Saturday's rally, the city hall received a delegation of demonstrators, who said they were encouraged by what had been said.