About 80 torchbearers carried, under tight security, the flame down into the heart of Mucat.
The carnival-like atmosphere in tightly controlled Oman was a welcome respite for Olympic organizers after protests over China's human rights that marked torch stops in Paris, London and San Francisco.
Officials said they expected a smooth relay of the flame, adding that any attempt to disrupt the parade would be dealt with severely.
Dozens of policemen were deployed along the torch route, where streets were closed off and parking was banned. An army helicopter hovered overhead.
The vice chairman of the national Olympic committee said Oman was chosen for the relay because of the "excellent relationship that goes back a long way between Oman and China and the economic ties that bind us."
Oman has strong economic ties with China, a major importer of its oil.
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