The billionaire tycoon has been described by some Czech media as the "Czech trump card" as he has a huge business empire and populist leanings.
A crowd estimated by the organizers to be around 250,000 people took over the plain overlooking the historic center of Prague, where mass protests took place three decades ago, eventually leading to the overthrow of the communist regime.
A vote of no confidence demanded by the opposition parties is scheduled for Wednesday.
Babis told the Czech media on Sunday that he respected the right of people to speak but did not understand the reasons for the protests.
Babis was accused of fraud in connection with EU subsidies which he had received from his former agrarian empire. An investigation ended with the police proposing to prosecute him. The prosecutors are now deciding whether to accuse the prime minister. He rejected the allegations.
Separately, the European Commission is investigating whether Babis had a conflict of interest because of his interest as prime minister and owner of a large corporation getting EU funds.
A Commission draft report leaked to the Czech media earlier this month said that Babis' business should not have access to EU funding, and it was suggested that the money received in the past may have to be returned by the Czech Republic.
The Commission stated that it would not comment on ongoing audits. The Czech Ministry of Finance confirmed that it had received a preliminary audit report, but did not comment further.
Babis dismissed the allegations and said the audit was "an attack on the Czech Republic". Apart from the resignation of Babis and Benesova, the demonstrators also demand that the economic empire of Babis, Agrofert, receives no more subsidies, tax breaks, investment incentives and public tenders.
Babis is not only Prime Minister and Agrartycoon, but also the owner of Mafra, a large Czech publishing house that owns two of the country's largest daily newspapers. The demonstrators want him to sell his share of the media.
They also call on legislators to press for new safeguards for the country's justice system.
Who is Babis?
Babis is a divisive figure in the Czech Republic. The billionaire tycoon first stormed into Czech politics in 2012 and became prime minister in 2017. Its populist ANO movement then received nearly 30% of the vote – almost three times more than the conservative ODS party, which came in second place.
Another Babis The controversy relates to his alleged role as a secret agent of Communist secret police StB. The politician born in Slovakia was identified by historians as archives under the codename "Bures".
Tomas Etzler contributed to this report.