The Kurdistan Workers Party, or PKK, announced in May it would disband and renounce armed conflict, ending four decades of hostilities.
The move came after PKK leader Abdullah Ocalan, who has been imprisoned on an island near Istanbul since 1999, urged his group in February to convene a congress and formally disband and disarm.
In Turkey, Devlet Bahceli, President Recep Tayyip Erdogan's nationalist ally who initiated the peace process, welcomed the development.
"Starting today, members of the separatist terrorist organisation have begun surrendering their weapons in groups, marking historic developments that signal the end of a dark era," Bahceli said in a statement.
"These are exceptionally important days for both Turkey and our region."
Bahceli, who has traditionally maintained a hardline stance against the PKK, had surprised everyone in October when he suggested in parliament that Ocalan could be granted parole if he renounced violence and disbanded the PKK.
The ceremony took place on Friday in the mountains outside the city of Sulaymaniyah in northern Iraq's semi-autonomous Kurdish region.
The state-run Iraqi News Agency reported that "the process will take place in stages, with a group of party members initially laying down their weapons symbolically".
The disarmament process is expected to be completed by September, the agency reported.
The PKK has long maintained bases in the mountains of northern Iraq. Turkish forces have launched offensives and air strikes against the PKK in Iraq and have set up bases in the area.
Scores of villages have emptied as a result.
The Iraqi government in Baghdad last year announced an official ban on the separatist group, which has long been prohibited in Turkey.
It was not immediately clear how many fighters took part in Friday's ceremony.
Officials had earlier said that the number might be a few dozen.
