Thousands of Hamas supporters, some of them flashing victory signs, were braving the rain to attend the event. Some parents brought children dressed in military uniforms.
The anniversary comes two weeks after the bloodiest round of Israel-Gaza fighting in four years.
Hamas has portrayed itself as the victor of the eight-day conflict because Israel agreed to an Egyptian-brokered truce instead of sending in ground troops, as it initially threatened.
The image of Hamas' long-exiled chief triumphantly walking around the Gaza Strip, flashing victory signs beside Islamic militant leaders Friday, illustrates how the group's defiance of Israel is forcing a change in Palestinian politics.
Buoyed by the rise of fellow Islamists in Egypt, Mashaal and his allies are confronting Israel with the specter of a change in the balance of power between the two rival Palestinian factions – Hamas and the Western-backed Palestinian President Mahmoud Abbas' Fatah.
Mashaal, 56, who left the West Bank as a child and now leads Hamas from the Gulf state of Qatar, broke into tears Friday as he arrived in the Gaza Strip.
Mashaal's visit would have been unthinkable just a few weeks ago. He would have been an easy target for Israel. Fifteen years ago, Mashaal was nearly assassinated in Jordan by Israeli agents who squirted a deadly poison in his ear, narrowly escaping after the U.S. forced Benjamin Netanyahu, then serving his first term as Israel's prime minister, to provide the antidote.