The vote Sunday and Monday is a last major test of Berlusconi's popularity before his term runs out in 2013, and comes as the flamboyant Italian leader is embroiled in legal and sex scandals.
The centre-right incumbent in Milan, Letizia Moratti, is expected to retain her post, but polls show she might not win outright in the first round and could be forced into a runoff vote at the end of the month.
Some 13 million of Italy's 49 million-strong voters are eligible to cast ballots, with weak growth and unemployment as well as local issues notably the chronic waste disposal crisis in Naples uppermost in their minds.
In Milan, Berlusconi's hometown, the 74-year-old prime minister has campaigned vigorously on Moratti's behalf, even heading the electoral list there.
The daily Il Giornale, owned by the Berlusconi family, gave "10 reasons to re-elect Letizia Moratti" against her centre-left rival, lawyer Giuliano Pisapia, who polled at between 40 and 42 percent against 44 to 48 percent for Moratti in voter surveys.
"In two weeks, what should have been local elections has become an umpteenth referendum" for or against Berlusconi, said the Turin daily La Stampa.
Berlusconi himself agreed, saying: "It's not a normal mayoral election, it's an election about me and my government."
Speaking to his entourage, according to the left-leaning daily La Repubblica, he added: "I've done what I could... but I must admit I'm a bit worried."
Leading daily Corriere della Sera underscored the stakes for the billionaire leader: "Thirteen million Italians are called to vote but only some of them, those from Milan, can make the difference for the government and the right."
Italy's interior ministry said that as of 1700 GMT turnout was 39.2 percent, up from a 37.2 percent showing in the previous poll five years ago.
The billionaire Berlusconi, head of a sprawling media empire, is currently a defendant in three trials in Milan, including one in which he is accused of having sex with an underage prostitute and using his position to cover it up.
Berlusconi has also been hit by the defection of a key ally, parliament speaker Gianfranco Fini and around 40 lawmakers.
His popularity reached a record low of 31 percent in the latest poll last month down from more than 60 percent after his election to a third stint as prime minister in 2008.
But he has remained in power thanks to the support of the anti-immigrant Northern League and has gone on the offensive, accusing prosecutors of waging a hate campaign against him and painting his leftist critics as communist extremists.
The elections involve 1,310 communal administrations around 16 percent of the total including Bologna, Naples and Turin in addition to Milan.
Centre-left incumbents are expected to hold on to the traditionally "red" cities of Bologna and Turin.
Naples is less certain as the southern city faces yet another waste disposal crisis.
Despite promises by local authorities and the central government to fix the city's garbage problems, Naples has recently been swamped with waste, prompting Berlusconi to dispatch military to the region to help with clean up.
The outcome in Naples will likely hinge on the second-round run-off.
Polls were to close at 10:00 pm (2000 GMT) on Sunday, reopening Monday at 7:00 am until 3:00 pm.
A second round is set for May 29 and 30.