The rally by demonstrators allied with exiled former Prime Minister Thaksin Shinawatra came three days before Thailand is to host the annual summit of the 10-member Association of Southeast Asian Nations.
The crowd swelled to about 20,000 people as dusk approached, police said.
Thailand was plagued by political upheaval last year when demonstrators who opposed Thaksin's allies in the previous government occupied the seat of government for three months. They also held Bangkok's two airports for eight days in November and December.
The protest ended only when a court ruled to oust Thaksin's allies for electoral fraud, and Prime Minister Abhisit Vejjajiva was voted into office by parliament.
One of the protest's leaders, Jakrapob Penkair, said the demonstration Tuesday was being staged this week to show Thailand's Southeast Asian neighbors that Abhisit's government had no right to rule.
Abhisit's Democrat Party, which came in second in a December 2007 general election, cobbled together a ruling coalition from defecting supporters of the previous administration.
"This government is full of robbers," said Jatuporn Phromphan, another protest leader, on top of a pickup truck amid loud cheers. "The majority of this country did not vote for them but somehow they are in power because the elite want them to be."
Abhisit's government held its weekly Cabinet meeting in Hua Hin, 90 miles southwest of Bangkok, instead of its usual venue at Government House, at which some 3,000 police in riot gear were deployed. Two thousand army troops were on standby in the area, said police Lt. Gen. Worapong Chiewpreecha.
"We will not use violence," Abhisit told reporters. "I am ready to walk into (the Government House) as long as there are no weapons."
Jakrapob said the demonstrators would camp out there for at least two days to press their demands but would not break in as their political rivals had done.
The Tuesday protest was organized by the Democratic Alliance against Dictatorship - commonly known as the "red shirts" because of their attire, which contrasts with the yellow shirts worn by their rivals, the self-styled People's Alliance for Democracy, who dominated last years' protests. The DAAD is an eclectic mix of Thaksin loyalists, rural farmers and laborers, all of whom benefited from Thaksin's policies that reached out to the poor.
Thaksin, a former telecommunications tycoon, remains popular among the rural majority for introducing social welfare plans, including virtually free medical care. He now lives in self-imposed exile after being forced from office in a 2006 military coup for alleged corruption and abuse of power.