Ethiopians are voting in the first election since a 2005 poll was marred by protests that led to the deaths of 200 people.
Long queues of voters had formed at some polling stations in the capital, Addis Ababa, before polls opened at 0600 .
Prime Minister Meles Zenawi, a Western ally against militants in Somalia, is seeking re-election.
But the opposition has already cried foul.
A spokesman for the main opposition alliance, Medrek, said its observers were being intimidated and arrested in some parts of the country.
"We think we may not accept the results," Negasso Gidada told the AP news agency.
A government spokesman dismissed the claims, saying the opposition must know it had lost.
The BBC's Will Ross in Addis Ababa says voting in the polling stations he has visited in the capital appears well organised, with a steady flow of voters.
The opposition claimed the 2005 election was rigged in favour of Mr Meles' governing Ethiopian People's Revolutionary Democratic Front's (EPRDF).
Mr Meles is widely expected to be re-elected, with the opposition seen as divided and disorganised.
Our correspondent says the reputation of Africa's second most populous country is on the line following the events in 2005.
The head of the Electoral Board, Merga Bekana, says that with an amended electoral law and adequate training, the problems of the last election will be averted.
"There is no way to cheat the results, so the results are very clear this time. We have learnt quite a lot," he told the BBC.
There are thousands of local observers spread out across the country although some in the opposition do not see them as neutral.
The Ethiopian government has banned foreign embassy staff from monitoring the poll - it does not see them as experts on elections and says it does not want diplomatic relations blurred.
The European Union has 170 observers on the ground - a relatively large number which our correspondent says shows how important the EU takes his event.
Some rights activists dismissed the elections as a charade months ago, saying the government had muzzled the media and was effectively blacklisting opposition supporters.
The governing dismisses such talk as propaganda.
Some 32 million people have registered to elect the 547 members of the lower House of Representatives, along with regional councillors who in turn choose the upper House of Federation.
