Imams at more than 2,000 mosques took part in the event organised by Germany's four main Muslim groups, with government ministers, lawmakers and city mayors joining in.
Vigils and peace rallies were held after traditional Friday noon prayers in a number of German cities including Berlin, Hamburg, Mölln, Bielefeld, Oldenburg, Frankfurt am Main and Stuttgart.
In Berlin around 1,000 Muslims took part in a public prayer on the street outside the Mevlana mosque in Kreuzberg which was damaged in an arson attack in August
"We must stand united as a society when there are hate crimes, whether against churches, mosques, synagogues or other places of worship," said Ali Kizilkaya, spokesman of the Coordination Council of Muslims.
Aiman Mazyek, chairman of the Central Council of Muslims, said Germany's Muslims wanted to take a clear stand against Islamic State (IS) group fighting in Iraq and Syria, and other jihadist movements.
"These are terrorists and murderers who drag Islam into the dirt and bring hatred and suffering to the people, including to their own fellow Muslims, in Syria, in Iraq and elsewhere," he wrote in the top-selling Bild newspaper.
"We want to make clear that the majority of Muslims in this country and around the world think and act differently. Islam is a peaceful religion."
Germany's interior minister Thomas de Maizière supported the day of action by visiting a mosque in Hanover on Friday afternoon.
The day of protest follows a rally against anti-Semitism in Berlin last Sunday in which Jewish leaders and German politicians led by Chancellor Angela Merkel condemned a recent spate of slurs and attacks against Jews.
Tempers flared at a series of pro-Palestinian demonstrations in July, during Israel's assault on Gaza, as some protesters chanted that Jews should be "gassed" and "slaughtered".
Muslims say they have also been the target of hate speech and vandalism of their houses of worship amid rising public fear of Islamist militancy, and of the role of European jihadists fighting in Syria and Iraq.
German security services say some 400 German citizens have joined jihadists in Syria and Iraq, of whom about 130 have since come home, while German nationals have also fought with Somalia's al-Qaeda-linked al-Shabaab.
This month the appearance of self-styled "Sharia police" vigilantes in the western city of Wuppertal sparked outrage in Germany.
Mazyek said at a press conference on Tuesday that a rise in anti-Muslim sentiment means that "we have exhausting and difficult times behind and presumably also ahead of us".
He said there had been five arson and other attacks on mosques in the past three weeks.
Three charged over Isis propaganda
On Friday prosecutors brought charges against three Germans accused of sending money and camera equipment to help the jihadist group Islamic State make propaganda videos.
The accused were identified only as Karolina M., 25, who has been in pre-trial detention since March, as well as Jennifer Vincenza M. and Ahmed-Sadiq M., both 22, who have not been detained.
Karolina M., a German-Polish dual citizen, is married under Islamic law to an Isis militant in Syria, prosecutors said.
"For the production of Isis propaganda videos she sent him, through middle men, cameras and accessories worth €1,100 in October 2013," they said.
"Shortly after, she travelled to Syria and handed the IS member three more cameras and more than €5,000 in cash."
The prosecutors said she returned to Germany and later sent him another €6,000 in six tranches, including more than €2,000 that the other two defendants had collected.
The three are charged with supporting a foreign terrorist organisation.