The celebrations cost about $600,000 (£400,000), reports say.
In his speech, Mr Mugabe – who has ruled since 1980 – denied claims that he was trying to intimidate political rivals ahead of a new election.
Mr Mugabe will be contesting the election later this year, hoping to secure another five-year term in office.
‘Down with imperialism’
The day before of the celebrations in Bindura, residents were given an hour off work to clean the town’s streets.
Wearing an elegant suit and a red cap with his year of birth, Mr Mugabe waved to the crowds, flanked by his wife and two children.
He later cut the birthday cake and released 89 balloons into the sky.
In his speech, Mr Mugabe urged his supporters to go “forward with winning elections, down with imperialism”.
Mr Mugabe’s actual birthday was nine days ago, but this weekend was the chance for his supporters to celebrate.
Zimbabwe is now moving towards a crucial period of political transition, the BBC’s Peter Biles in Johannesburg reports.
He adds that a referendum on a new constitution will precede the presidential elections.
The polls would herald the end of a shaky government coalition between Mr Mugabe and his rival Prime Minister Morgan Tsvangirai.
The coalition between Mr Mugabe’s Zanu-PF party and Mr Tsvangirai’s MDC party was formed under pressure from regional leaders after the disputed 2008 election.
Source: BBC
Mugabe holds lavish birthday party
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Thousands of people have attended a lavish party to celebrate Zimbabwean President Robert Mugabe’s 89th birthday in the mining town of Bindura. Mr Mugabe was presented with a cake said to weigh 89kg (196lb), and gold coins were minted to mark the occasion.