Up to 40,000 doctors joined the rally, demanding the government scrap the plan, according to the Korean Medical Association (KMA), which represents private practitioners and had organised the protest.
Police put the number of demonstrators at about 12,000.
The rally comes a day after a government deadline for the trainee doctors to return to work expired. Nearly 9,000 resident and intern doctors at major hospitals, or about 70% of the country's total, walked off the job late February, leading to the cancellation of some surgeries and treatments and straining emergency departments.
Joo Soo-ho, an official at the KMA, said the government should reform the existing medical system first before raising medical school quotas. The government wants to boost medical school admissions by 2,000 starting in 2025 from the current annual figure of 3,000, and eventually add 10,000 more by 2035.
"It was the government that set the deadline, and regardless of the deadline and pressure, we will continue to push forward as we think," Joo said.
Prime Minister Han Duck-soo on Sunday urged the KMA to cease the protest and encourage trainee doctors to return to their patients.
Interior minister Lee Sang-min also said the young doctors would not be punished if they returned to work by Sunday, but if they fail to do so, they could face administrative and legal penalties, including suspension of their medical licenses.
The government has publicly issued a back-to-work order for 13 doctors, including vocal critics of the plan, and raided some KMA officials on Friday.
Cho Ji-ho, commissioner of the Seoul Metropolitan Police Agency, said the police has banned several KMA members from leaving the country as part of an investigation into illicit activities linked to the protest.
