Hundreds of protesters swarmed into the Hong Kong legislature's main building, tearing down portraits and spray-painting pro-democracy slogans in the main chamber as frustration over a lack of response to opposition demands boiled over.
Police carrying riot shields and firing tear gas moved in shortly after midnight to clear surrounding streets and then moved into the already vacated legislative chamber.
A spokesman had earlier broadcast a warning that "appropriate force" would be used in the clearance operation, but there was no immediate word on any arrests or injuries.
The sharp escalation in tactics came on the anniversary of the former British colony's return to China, a city holiday, and reflected mounting frustration with Hong Kong's leader for not responding to protesters' demands after several weeks of demonstrations.
The protesters had smashed windows and pried open steel security gates to gain entrance to the building.
Police in riot gear retreated as the protesters entered, avoiding a confrontation and giving them the run of the building.
The activists stood on legislators' desks in the main legislative chamber, painted over the territory's emblem high on a wall and wrote slogans calling for a democratic election of the city's leader and denouncing now-suspended extradition legislation that sparked the protests.
Many wore yellow and white helmets, face masks and the black T-shirts that have become their uniform.
The actions prompted organisers of a peaceful march against the extradition bill to change the end point of their protest from the legislature to a nearby park, after police asked them to either call it off or change the route.
Police wanted the march to end earlier in the Wan Chai district, but organisers said that would leave out many people who planned to join the march along the way.
Police estimated 190,000 people joined the peaceful march, the third major one in as many weeks. Organisers estimated the number at 550,000.
Hong Kong has been hit by weeks of protests over a government attempt to change extradition laws to allow suspects to be sent to China to face trial.
The proposed legislation, on which debate has been suspended indefinitely, increased fears of eroding freedoms in the territory, which Britain returned to China on July 1 1997.
Protesters want the bills formally withdrawn and Hong Kong's embattled leader, Carrie Lam, to resign.
Ms Lam, who has come under withering criticism for trying to push the legislation through, pledged to be more responsive to public sentiment but has not responded directly to protesters' demands.
In an address after a flag-raising ceremony marking the anniversary of the handover, she said the protests and two earlier marches that attracted hundreds of thousands of participants have taught her that she needs to listen better to youth and people in general.