"The Iraqi government repatriated 161 families, including 659 people, from Al-Hol camp to Iraq," said the Syrian Observatory for Human Rights.
The Iraqi families left Al-Hol camp, which lies less than 10 kilometres (six miles) from the Iraqi border for their home country in a move coordinated by with Iraqi authorities, the monitor said.
A Kurdish security source who requested anonymity said that 634 Iraqis had crossed from Al-Hol to their country on Tuesday.
The overcrowded, Kurdish-run camp is home to 55,000 people, and houses thousands of relatives of suspected Islamic State group members.
It is the largest camp for displaced people who fled after IS fighters were dislodged from their last scrap of territory in Syria in 2019.
The UN said more than 100 people have been murdered in the increasingly lawless camp since the start of 2021.
Kurdish forces arrested more than 200 people last month, after a three-week operation against IS supporters there discovered tunnels used by jihadists and seized an arsenal of weapons.
Kurdish authorities have repeatedly called on countries to repatriate their citizens from crowded camps.
But nations have mostly received them only sporadically, fearing security threats and a domestic political backlash.
Iraq should repatriate 500 families in total from Al-Hol this year, state news agency INA reported earlier this year.
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