Speaking at the ceremony, Vanuatu Prime Minister Charlot Salwai thanked citizens and residents of the country and all development partners for their hard work and contributions to nation building.
"I want to congratulate and acknowledge the work of all citizens, residents, NGOs, civil society and foreign volunteers for all the good work that you have been doing to help the development of Vanuatu."
Vanuatu secured its independence from the joint colonial rule of Britain and France on 30 July 1980.
Passport machines
Meanwhile, the Vanuatu Daily Post reported Internal Affairs Minister Johnny Koanapo saying the people of Vanuatu received "fitting present" with the arrival of new passport machines coinciding with independence celebration.
Koanapo was reported saying the machines - which arrived on Saturday and expected to print over 1000 passports per week - will be installed soon.
The newspaper reported engineers responsible for the installation will arrive in Vanuatu on Wednesday, aiming have at least one machine operational by Friday.
According to Koanapo there are currently 7000 passports pending.