The celebrations come at a time when the world's attention is focused on Ukraine where pro-Russian insurgents are preparing a referendum on secession.
Putin made no reference to the situation in Ukraine in his speech in Moscow, which focused on the historic importance of the victory over Nazi Germany. But he then headed to Crimea, where he is to oversee a massive navy parade.
In a sign of triumph, parading troops on Red Square included a marine unit from the Black Sea Fleet that flew the Crimean flag on its armored personnel carriers.
About 11,000 Russian troops proudly marched across Red Square to the tunes of marches and patriotic songs, followed by columns of dozens of tanks and rocket launchers. About 70 combat aircraft, including giant nuclear-capable strategic bombers, roared overhead.
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Victory Day is Russia's most important secular holiday and a key element of the national identity, honoring the armed forces and the millions who died in World War II. This year it comes as Russia is locked in the worst crisis with the West since the end of the Cold War.
The parade, which featured massive Topol-M intercontinental ballistic missiles, comes a day after Putin visited the Defense Ministry's main operational center to watch a massive military exercise that simulated a retaliatory nuclear strike in response to an enemy attack. The official statements describing the maneuvers were strikingly blunt, reflecting simmering tensions with the West.
The West and the Ukrainian government accuse Russia of fomenting the unrest in Ukraine's east, where insurgents have seized government buildings in a dozen of cities and towns, and fought with government troops. They have set a referendum on independence for Sunday, a vote similar to a plebiscite that paved the way for Moscow's annexation of Crimea in March.
Putin's surprise call on Wednesday for delaying the referendum in eastern Ukraine appeared to reflect Russia's desire to distance itself from the separatists as it bargains with the West over a settlement to the Ukrainian crisis.
But insurgents in the Russian-speaking east defied Putin's call and said they would go ahead with the referendum. While reflecting the anger against the central government shared by many in the east, the move also supported Moscow's denial of engineering the mutiny.
The main eastern city of Donetsk was calm as a handful of veterans gathered to commemorate Victory Day, carrying former regiment flags and playing old patriotic songs.
In the Black Sea port of Odessa, which last week was rocked by violent clashes between pro-Russian forces and supporters of the central government that left nearly 50 people died, police arrested a municipal legislator and two pro-Russian activists accused of staging the riots.
Authorities also beefed up security in the city, fearing more violence, and the local governor issued an order banning public display of Russian flags. "We shouldn't allow emotions to spill into the streets," Gov. Ihor Palytsa said.
In Kiev on Friday, a fire in a cable tunnel briefly interrupted broadcasts of several television channels. Viktoria Syumar, a deputy head of Ukraine's National Security and Defense Council, said that the fire was an act of sabotage.
Putin said Wednesday that Russia had withdrawn its forces from the Ukrainian border, but Pentagon spokesman Army Col. Steve Warren said Thursday there had been no evidence of a pullback.
Russia wants Ukraine to adopt a new constitution that would give broad powers to its regions, helping Moscow to keep the country's east in its orbit. It also has sought guarantees that Ukraine would not join NATO. Ukraine has rejected the Russian demands.
Swiss President Didier Burkhalter, who currently chairs the Organization for Security and Cooperation in Europe, offered a roadmap for settling the crisis during his meeting with Putin this week, but it hasn't been made public yet.
The OSCE's Secretary-General Lamberto Zannier visited Kiev Friday. He told The Associated Press that "we are now looking at how we can move ahead on process of de-escalation." Zannier criticized the referendum in the east, calling it a "divisive initiative."
"The OSCE will certainly not recognize the referendum of this kind," he said.
The United States and the European Union have slapped travel bans and asset freezes on members of Putin's entourage in response to the annexation of Crimea. They threatened to introduce harsher sanctions if Russia continues to destabilize eastern Ukraine and tries to derail the May 25 presidential vote.
Despite the sanctions, Putin is set to travel to France in early June for a ceremony marking the 70th anniversary of the D-Day invasion that hastened the end of World War II, his first encounter with Western leaders since the start of the Ukrainian crisis.