The militants implemented an extreme version of Islam which associated toys with a face, like dolls, with idolatry. They encouraged youngsters to train on weapons and changed text books to reflect their military ideology. Children were asked to add up bombs or bullets in maths exercises. Eid prayers were allowed under Islamic State but festivities were not.
But for many, Sunday's Eid celebrations were overshadowed by the destruction of their historic leaning minaret, blown up by the militants on Wednesday, and fears for thousands of civilians trapped in the Old City in western Mosul still under Islamic State control.
"It won't be real Eid before we return home," said a man in his sixties, displaced from the western side of the city, across the Tigris river, where fighting continues.
Some expressed sadness over the destruction of the 850-year-old Grand al-Nuri mosque and its leaning 150-foot (45-metre) minaret.
"Eid is not the same," said a man who declined to give his name as fear is still present even though Iraqi forces dislodged the insurgents from the eastern part of the city months ago.
Iraqi forces took the eastern side from Islamic State in January, after 100 days of fighting, and started attacking the western side in February. The militants are now besieged in Mosul's Old City.
"As our heroic forces are closer to declaring final victory over the Daesh (Islamic State) gangs, I offer my most sincere congratulations for Eidul-Fitr," Prime Minister Haider al-Abadi said in a statement.
A US-led international coalition is providing air and ground support in the 8-month-old offensive to drive the militants from their de facto capital in Iraq.
About 350 Islamic State fighters, most of them non-Iraqis, are defending their remaining stronghold in Mosul's densely populated Old City, an Iraqi general said on Sunday. He expected the battle for the city to end in days.