The race track has been heavily guarded by police, dogs and armoured vehicles to keep activists away.
On Saturday, protests intensified after the body of a Shia man killed in overnight clashes with security forces was discovered on a rooftop.
Many protesters wanted the race to be cancelled, but the government was determined it would go ahead.
West of the capital, Manama, demonstrators have set up barricades of burning tyres.
Witnesses say police have set up checkpoints near the circuit and officers armed with pump-action shotguns are lining nearby roads.
Ahead of the race Bahrain's King Hamad al-Khalifa said that he was committed to reform in the kingdom.
"I also want to make clear my personal commitment to reform and reconciliation in our great country. The door is always open for sincere dialogue amongst all our people," he said in a statement.
His comments came after police fired tear gas to disperse thousands of protesters who took to the streets on Saturday. Many of them had gathered near the village where anti-government demonstrator Salah Abbas Habib's body was found.
British Foreign Secretary William Hague also called for restraint in dealing with protesters.
The protesters are demanding an end to discrimination against the majority Shia Muslim community by the Sunni royal family.
Ahead of Sunday's race, armoured vehicles patrolled the streets to stamp out any demonstrations.
Formula 1's governing body, the FIA, only went ahead with the Grand Prix after the government said it had security under control. The race was eventually won by two-time world champion Sebastian Vettel.
Last year's Bahraini Grand Prix was cancelled after 35 people died during a crackdown on mass demonstrations calling for greater democracy.
The Bahraini government, headed by the al-Khalifa dynasty, had been keen for this year's race to go ahead to prove it had the 14-month uprising under control.
BBC correspondent Caroline Hawley says that staging the event has had the opposite effect, highlighting the small Gulf state's political problems.
On Friday, Bahrain's Crown Prince Salman bin Hamad al-Khalifa said cancelling the Grand Prix "just empowers extremists", and insisted that holding the race would "build bridges across communities".
FIA President Jean Todt said he had no regrets about the race. He said extensive investigations into the situation in Bahrain had unearthed "nothing (that) could allow us to stop the race".
"On rational facts, it was decided there was no reason to change our mind," Mr Todt said.
Shia protesters say going ahead with the race lends international legitimacy to a government that is continuing to suppress opposition with violent means.
Human rights groups and activists estimate that at least 25 people have died since the start of the latest protests, many as a result of what has been described as the excessive use of tear gas.
Hunger strikeMeanwhile, the Danish ambassador visited hunger striker Abdul Hadi al-Khawaja - who also holds Danish citizenship - in hospital on Sunday, Bahrain's BNA news agency said.
It said that the human rights and political activist was in "good health". His family have consistently maintained that he is in a critical condition.
He has been on hunger strike for more than 70 days after being arrested for protesting against the government. He is now reported to be refusing water.
Mr al-Khawaja's daughter, Zeinab al-Khawaja, was also briefly detained amid protests on Saturday afternoon.
The BBC's Bill Law says the visit by the Danish ambassador is fuelling suggestions that Mr al-Khawaja will be stripped of his Bahraini citizenship and sent to Denmark.
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