Caledonian MacBrayne said 5,055,827 passengers and 1,356,396 cars travelled on its vessels in 2016.
The figures mark the first full year of the road equivalent tariff (RET) on the network, which aimed to equate ticket prices with the cost of road journeys.
The busiest route was Ardrossan to Brodick on the Isle of Arran.
The route carried 828,262 people and 202,843 cars in 2016 - an annual rise of 8.7% and 6.84% respectively.
The Largs to Isle of Cumbrae route was the second busiest, carrying 738,549 passengers and went up by 7.49 % on the previous year.
In terms of cars, there was a 74% rise in vehicles travelling on the Tobermory to Kilchoan crossing.
CalMac said a larger vessel would operate in summer 2017 to cater for the growth in numbers.
The Rothesay route was second-busiest with 172,897 cars, up 19.12% on the previous year's figures.
Across the network, 428,801 more passengers and 186,695 more cars travelled on CalMac's ferry services in 2016.
The RET scheme, which began a phased introduction in 2008, led to sharp drops in fares across several routes.
However, it took until October 2015 before there was full network coverage of the scheme.
The figures come after CalMac announced losses of £5m in November last year.
CalMac said 2016 was the first year since 1997 that it had carried more than five million passengers.
Managing director Martin Dorchester said: "Last year was our busiest in terms of passengers for two decades.
"This is a great reflection of the professionalism of our staff in dealing with an increase of more than 400,000 passengers and almost 190,000 cars whilst still running a smooth operation to help all our travellers, whether islanders or visitors, business or pleasure, to get where they are going."
Transport Minister Humza Yousaf added: "Cheaper fares bring benefits to locals, visitors and local businesses, making ferry travel more attractive and accessible, as well as providing a boost to the tourist trade."
CalMac said evidence on a number of routes suggested the reduction in fares had led to islanders journeying more, with many taking their cars with them.
Source (BBC): http://www.bbc.co.uk/news/uk-scotland-scotland-business-38969975