It is the second time voters have been asked to give the president unlimited terms
Venezuelans are voting on a proposal that would remove limits on how often politicians, including President Hugo Chavez, can run for office.
Mr Chavez has said he needs to stay in office beyond the end of his second term in 2012 so he can secure what he calls Venezuela's socialist revolution.
But critics say the constitutional amendment would concentrate power in the president's hands for decades.
Mr Chavez has said he will respect the result no matter what it is.
"My political destiny will be decided today," said Mr Chavez, a former paratrooper, after casting his vote in the capital, Caracas.
"This is important for me as a human being and as a soldier in this fight," he said.
"We'll recognize the result, whatever it is, once it is announced by the National Electoral Council."
Fireworks and bugles
More than 16 million Venezuelans are eligible to vote in the referendum and the outcome is expected to be close.
Many voters in the capital Caracas were woken by fireworks and recordings of military bugles played from loudspeakers on passing trucks, and long queues formed as polling stations opened at 0600 (1030 GMT).
Security across the country is tight, with thousands of troops on duty to ensure the voting passes off peacefully.
Dozens of election observers from international bodies such as the UN and the Organisation of American States are also on hand to verify that the referendum is free and fair.
Under the present constitution, the president is limited to two six-year terms in office, which means that Hugo Chavez would have to leave the presidency in 2012.
But he says he wants to remain in office until 2021, as long as he can keep winning elections.
A proposal to end presidential term limits was one of a package of 69 constitutional changes narrowly rejected in a 2007 referendum.
The issue of indefinite re-election has divided Venezuelans like almost no other, says the BBC's Will Grant in Caracas.
For a second time in little over a year the question is being decided at the ballot box.
The latest referendum, if passed, would remove the limit on the number of times local governors and state politicians, as well as the president, can stand for office.
Some analysts say this change could make the difference for Mr Chavez, as many local governors are said to back the measure this time around.
But the opposition is adamant that the proposal has been rejected once and should not be back under discussion, our correspondent says.
Mr Chavez celebrated 10 years in power earlier this month. His current term is due to end in 2012.
Long queues formed in the capital Caracas as polls opened at 0600
"Ten years is nothing," Mr Chavez said at a news conference on Saturday. "I don't know what they're complaining about."
"On Monday I'll wake up looking beyond 2013, and that will give me more confidence in what we're doing."
Mr Chavez also said that the expulsion on Friday of a Spanish deputy of the European parliament, Luis Herrero, would not affect Venezuela's relationship with Spain.
Mr Herrero had been invited by a Venezuelan opposition party to observe Sunday's referendum and had criticised a decision to keep polls open for two hours longer than usual.