As part of the communist country's second gay pride parade, some two hundred activists waving rainbow flags and carrying hand-painted banners biked in a colourful convoy through central Hanoi.
Participants said they hoped to reduce prejudice and discrimination against the Lesbian Gay Bisexual and Transgender (LGBT) community in Vietnam, where Confucian social mores -- with their emphasis on tradition and family -- still dominate.
"I want society to accept us and I am proud of myself," said 17-year-old participant Vu Ngoc Anh, a highschool student.
"We hope people will understand more about the LGBT community... as being a homosexual is nothing bad," Anh, who is herself a lesbian, told AFP at the parade.
Organised by Hanoi's increasingly visible LGBT community, the event went ahead peacefully.
Police watched the activists as they gathered with bicycles and motorbikes in front of a statue of Russian communist leader Lenin in the city centre, but made no move to stop them despite their lack of official permission.
Vietnam normally tightly restricts demonstrations.
The country's first ever gay pride parade was held a year ago.
Homosexuality remains largely taboo in Vietnam, with gay people routinely portrayed in the media as comical figures or as suffering from a condition that can be treated.
The country forbids same-sex unions but authorities are considering lifting the ban.
Gay rights have attracted high level support, with both the health and justice ministries coming out in support of lifting the ban on same-sex unions or even legalising gay marriage.
"In terms of human rights, people of the same sex have the rights to live... to love and pursue happiness," said Nguyen Viet Tien, deputy minister of health was quoted as saying on state media in April.
The law on marriage and family is due to be debated at the National Assembly later this year and any move to legalise gay unions would make Vietnam the first country in Asia to do so.
The move to lift the ban shows "a change in attitude of the state on the issue", civil law official Duong Dang Hue told the Dan Tri online newspaper.
Public opinion on LGBTs in Vietnam is changing "really fast", said Le Do Nga Linh, 29, a participant at the parade.
"I hope that we can get permission and have gay marriage really soon," she added.
Experts have highlighted the fact that going easy on gay rights -- which do not threaten the communist party's control -- may be a way for the authoritarian government to gloss over its otherwise poor rights record.