Students met on the Union Lawn near the Otago University Students' Association offices and marched to the Water of Leith steps, where they listened to speakers including members of the OUSA executive and research and enterprise deputy vice-chancellor Richard Blaikie.
About 30 people attended the rally.
Until 2013, eligible postgraduate students received a grant of up to $240 a week, but that was scrapped by the previous National-led government.
The Government made an election promise to restore postgraduate student allowances in 2017, but has not fulfilled that pledge.
OUSA postgraduate student rep Dermot Frengley said it was "simply not good enough and we won't let it be ignored any more".
"People shouldn't have to sacrifice themselves just to further their education."
OUSA vice-president Porourangi Templeton-Reedy spoke about the importance of getting more Maori into postgraduate education.
Postgraduate students make up more than 10% of all student enrolments at the university - in April last year 2992 equivalent full-time students (Efts) were enrolled in postgraduate courses, up from 2806 Efts at the same point in 2017, an increase of 4.1%.
Earlier this week it was announced postgraduate enrolments were up 85 Efts, or 2.8%, this year.