The first units, which were the embryo of the present-day armed forces, were lined up before the first Croatian President Franjo Tudjman.
Addressing today's ceremony, the President of the Republic and Commander in Chief of the Croatian Armed Forces, Ivo Josipovic, said that Croatia and its army could be proud of their achievements during the last 20 years.
Croatia has become a full member of NATO and is on the threshold of the European Union but we still must work on transforming Croatia into a developed European country, he said.
We have carried out many reforms and some of reforms are still ahead of us. I believe that we will soon conclude the EU accession negotiations and sign the Treaty of Accession and that Croatians will vote for their country's entry into the EU at a referendum. Croatian citizens deserve the living standards of EU citizens, Josipovic said.
The contribution of our Armed Forces to international peace missions is recognised and our soldiers set an exemplary model while doing dangerous duties, he said.
He pointed out to the sacrifice of courageous and unselfish people who gave their lives and health for Croatia's freedom and independence.
Josipovic voiced confidence that the government and the defence ministry would do their best to upgrade working conditions in the military sector.
He also decorated retired army general Martin Spegelj for his contribution to the formation of Croatia's Armed Force and his role in the defence of Croatia during the Homeland Defence War.
Prime Minister Jadranka Kosor said that the armed forces had been created almost from nothing during the aggression launched against Croatia.
She said that Croatia had the victorious army and that the Homeland Defence War was a just war of liberation.
The Chief of General Staff of the Croatian Armed Forces, Lieutenant General Drago Lovric, said that the first line-up of Croatian units 20 years ago also demonstrated the determination of Croatia to defend itself and democracy.
We are proud of our past as we have achieved freedom and independence in the toughest conditions, when we were faced with aggression launched by the much stronger enemy, the general said adding that the crown of the war of defence were operations Flash and Storm in 1995.
Defence Minister Davor Bozinovic said that the Croatian Armed Forces were today a reliable partner of the international community and a guarantor of the country's safety and security.
A battalion of the Croatian army carried out an exercise in Zagreb's Jarun Lake area on Saturday afternoon when also an airshow was also performed for visitors.
On Friday and Saturday, weapons of the Croatian army and police and the collection of the military and police museums will be put on display at Jarun, too.
The events marking the 20th anniversary of the formation of the Armed Forces end with Saturday evening's concert of military bands.
On Friday, 136 servicewomen and servicemen were promoted at a ceremony in the Croatian capital,