Participants gathered at a tourist resort south of Manama, where the first session of the dialogue -- which will convene three times a week -- were being held behind closed doors, an AFP correspondent said.
Taking part were 27 government representatives, including three ministers, eight members of the opposition, and members of pro-government Sunni political groups.
The kingdom has been in political deadlock since February 2011 and a similar round of talks failed that year, with the government of Bahrain, which is home to the US Fifth Fleet, making no political concessions to the opposition.
"We will decide today if we will continue to take part in the dialogue based on the response to the nine points," on which the opposition is seeking clarification from the government, said opposition representative Munira Fakhro.
The kingdom's opposition groups, including the major Shiite bloc, Al-Wefaq, met hours before the talks opened, announcing that they agreed to attend the opening session.
"The opposition will attend Sunday's session to discuss the nine points," leading opposition member Hasan Aali told reporters after a meeting at Al-Wefaq headquarters.
"For us, the talks haven't yet started," said Fakhro. "These are only preparatory meetings so we could decide whether or not we'll take part in the actual dialogue."
In the first session, participants were to discuss the agenda and the mechanisms of dialogue.
The opposition had welcomed the talks but also said that an agreement on the mechanism of the planned talks should be agreed in advance and the results of the talks be put to a referendum and not be submitted to King Hamad for approval.
The opposition has repeatedly said it is ready for meaningful talks, but has stuck to its demands for a real constitutional monarchy with an elected premier.
Prime Minister Sheikh Khalifa bin Salman Al-Khalifa, an uncle of King Hamad, has been in office since 1971.
The dialogue was launched amid daily opposition protests to mark the second anniversary of the uprising against the Sunni monarchy that erupted on February 14, 2011.
Opposition supporters have been demonstrating for more than a week ahead of the anniversary.
Before the talks kicked off, hundreds demonstrated in the Shiite village of Sitra calling for reforms as they carried Bahraini flags alongside portraits of detainees, arrested during the two years of unrest.
Supporters of the more radical February 14 youth movement have been protesting every night to chants of "Down Hamad" in reference to the kingdom's monarch.
Late on Saturday, dozens took to the streets in several Shiite villages, chanting: "The people want to overthrow the regime" and "No, no to dialogue."
Al-Wefaq withdrew from talks in July 2011, but said in December that it was ready for a new dialogue.
Bahrain has been rocked by unrest since its forces crushed the Shiite-led protests in March 2011. The unrest has so far left 80 people dead, according to the International Federation for Human Rights.