The demonstrators fought back by picking up tear gas canisters which they lobbed back at police, as a downpour helped to dampen the stinging impact of the chemical irritant commonly used in crowd control.
"Why is the government trying to intimidate citizens?" said Mohamad Manij Abdullah, 50, a businessman, who joined the rally.
"We are only trying to reform elections and have a free and fair government," he told AFP.
Despite the clampdown, pockets of protesters managed to evade roadblocks and gathered in front of Puduraya, swelling the crowd, while a police helicopter circled overhead.
Student Chew Ai Nee, 30, said: "We have to take to the streets because we have not been given any opportunity to express our demands for change... the government cannot silence us when we march."
Many of the protesters were shouting "Reformasi" (Reforms), "God is great" and "Long Live the People."
Police have declared the protests illegal, warning of street chaos.
Mukhriz Mahathir, a leading member of the powerful Umno, told AFP the government had to act to prevent anarchy.
"We cannot allow a minority group to protest and stir trouble in the country," he said, accusing protesters of provoking the police into firing tear gas "so that they can accuse the government of being heavy handed."
M'sians in Seoul back Bersih
Downtown Kuala Lumpur, normally a hive of activity on weekends, was deserted today as major roads into the commercial and tourist district were sealed off.
Public transport plying city routes was diverted, while long-distance buses were halted at terminals outside Kuala Lumpur.
Fears of violence have been highlighted because of plans by pro-government groups to hold a counter-rally.
Today's protest is spearheaded by Bersih, a broad but loose coalition of groups, including non-governmental organisations and opposition parties.
The demonstrators want reforms, including eradicating vote buying and preventing some people being allowed to vote several times during elections as part of a system which the opposition says favours the ruling party.
Meanwhile, about 30 Malaysians living in South Korea rallied in Seoul in support, after organisers called for solidarity walks and demonstrations in other countries including Australia, Cambodia, Japan, the United States and Taiwan.
Malaysia's opposition made major gains in 2008 elections against the ruling coalition but said they could have won more if elections rules were fair.
The country's next elections are widely expected to be called early next year, with the opposition aiming to end BN's half century rule.- AFP