The charismatic 41-year-old politician, who was barred from challenging Putin in March's presidential election, had called on Russians to stage rallies across the country on Saturday under the slogan "Not our Tsar".
Nearly 1,600 protesters were detained in 27 cities across Russia, according to OVD-Info, an independent monitor that tracks arrests, AFP reported.
Navalny, who was grabbed by police and carried away by his arms and legs shortly after he appeared in Moscow's packed Pushkin Square, was released shortly after midnight, he said.
"It appears they received an order 'do not put him behind bars before the inauguration'," Navalny said on Twitter, referring to the Moscow authorities.
He added that he was accused of organizing an unsanctioned rally and resisting police.
Navalny's lawyer Veronika Polyakova told AFP on Sunday that a Moscow court would convene next Friday to hear his case.
The hearing will come after Putin's planned swearing-in ceremony on Monday.
In January, Navalny was also detained over an unauthorized rally and was formally charged then released.
He had faced up to 30 days in jail and said at the time that the authorities wanted to keep him in jail on Election Day to prevent him from holding rallies -- but a planned court hearing was abruptly cancelled.
The anti-corruption blogger has faced a string of administrative and criminal charges that he and his supporters see as politically motivated since he became the leading opposition figure campaigning against Putin's rule at mass demonstrations in 2011 and 2012.