The local polls are the last vote before general elections in 2017 that will decide the Socialist leader's successor, at a time when the left in Chile -- as in much of Latin America -- is struggling.
In the elections, which serve as the unofficial opening of the 2017 campaign season, some 14 million voters will choose 346 mayors, plus city councils.
The vote comes as Bachelet, Chile's first woman president, has been sideswiped by a corruption scandal involving her son and is struggling to deliver on the reform agenda that got her elected by a landslide in 2013.
Opinion polls gave Bachelet's center-left coalition a razor-thin lead before polls opened Sunday. In the capital Santiago, a slow trickle of voters headed in to cast their ballots before polling stations close at about 6:00 pm (2100 GMT).
After testing political waters in the local polls, the country's parties will nominate presidential candidates and launch their campaigns.
Bachelet was one of the first to cast her ballot, though she had a minor mishap -- she initially forgot to sign the vote register.
The 65-year-old Bachelet -- who is serving for a second time as the South American country's president -- urged people to participate in the election, amid fears that Sunday's polls could be marred by low turnout.
"I would like to call on the people to come out and vote, because if you do not vote, others will make the decisions for you," the president said.
Bachelet is one of the last remaining leaders from a "pink tide" of left-wing governments that swept Latin America in the last decade.
She served a first term from 2006 to 2010, and -- constitutionally barred from immediate re-election -- returned in 2014.
But her popularity has plunged since accusations emerged last year that her son and his wife used political influence and inside information to make $5 million on a shady real estate deal.
A separate campaign-finance scandal involving some of the country's biggest firms and political parties has also been damaging.
Bachelet herself has not been implicated in either scandal, though they have hurt her image as a squeaky clean reformer.
Elected with 66 percent of the vote, her popularity now stands at just 23 percent.
The top name on the left currently being floated for a presidential run is Isabel Allende -- not to be confused with her distant relative of the same name, who is a best-selling novelist.
She is a senator and the daughter of former president Salvador Allende, who was overthrown by late dictator Augusto Pinochet in a 1973 coup.
Journalist and independent Senator Alejandro Guillier also scores well in opinion polls, while former president Ricardo Lagos (2000-2006) has thrown his hat in the ring, too.
On the right, former president Sebastian Pinera (2010-2014) is tipped as the likely nominee, but has yet to declare his candidacy.
The local polls come amid an economic slowdown in Chile, hit hard -- like much of the region -- by the plunge in global commodity prices.
Chile, the world's top copper producer, will see economic growth of just 1.75 percent this year, before a pickup of 2.25 percent in 2017, the government forecasts.