"They are voting with their eyes, and they believe there is a fresh start for Marjah under the government of Afghanistan," US Marine commander Larry Nicholson told the AFP news agency. "It's a very historical day, a new beginning."
Helmand Governor Mohammad Gulab Mangal raised the flag in the centre of town. He and Nicholson were flown in by helicopter from Camp Bastion elsewhere in the province.
Nicholson said Wednesday that Taliban resistance has been reduced to virtually nothing and that fighters have either left the area or blended in with residents.
Elite police batallions have moved into the town. They have been trained by US Marines and international forces hope that they will reverse the police force's reputation for corruption.
Despite the apparent victory, food, medicine and other supplies are running dangerously low. Despite mines planted on or near roads, residents are still fleeing to the provincial capital, Lashkar Gah. Nearly 4,000 families have fled the area since the offensive began.
Confusion reigns over an Afghan government claim that Pakistan has agreed to hand over captured Taliban commander Mullah Abdul Ghani Baradar.
Officials in Kabul that Islamabad has agreed in principle to Baradar's extradition. They say they have submitted a list of 42 people to be extradited.
But Pakistan's Interior Ministry says no formal request has been made and that "if Mullah Bardar has committed any crime inside Pakistan, he will be first tried in Pakistan".