The United States and the European Union voiced deep concern after Navalny and more than 1,000 others were detained in the Moscow protest on Sunday, with the State Department calling the arrests an "affront to democracy".
A Moscow district court handed down the sentence after finding Navalny guilty of disobeying police orders. His fine was 20,000 rubles ($350) for organising an unsanctioned protest.
The lawyer turned activist, 40, who has announced plans to run for president next year, called Sunday's protests after publishing a report accusing Prime Minister Dmitry Medvedev of controlling a property empire through a shadowy network of nonprofit organisations.
"The authorities are being accused of multi-million theft, but they remain silent," a haggard-looking Navalny said in court, insisting the protests were legal.
"More than 1,000 people were arrested yesterday but it is impossible to arrest millions," he said.
Navalny's lawyer Olga Mikhailova told reporters that his defence team would appeal the rulings.
About 7,000 to 8,000 people demonstrated in Moscow on Sunday, according to police figures, making it one of the biggest unauthorised rallies in Vladimir Putin's 17 years in power as president or prime minister.
The Kremlin called the protest "a provocation and a lie", and claimed that minors had been promised "financial rewards" to participate.
Demonstrations were held not just in the capital Moscow and second-largest city Saint Petersburg, but also in a number of provincial cities where protests are rarely seen.
They attracted a significant number of minors born since Putin came to power.
"I am very happy that a generation that wants to be citizens, that isn't afraid, was born in the country," Navalny said.
Kremlin spokesman Dmitry Peskov said Russians' "civic stance" would be respected if expressed legally but, without mentioning Navalny by name, suggested "some people will continue using (politically) active people... to their own ends, calling them to illegal and unauthorised actions".
EU urges protesters' release
Navalny was arrested as he was walking to the Moscow protest and another 1,030 people were detained, according to OVD-Info, a website that monitors detentions of activists.
Most were fined and released overnight, while about 120 remained in custody on Monday morning, OVD-Info said.
Navalny's campaign director Leonid Volkov was jailed for six days. according to the Interfax news agency.
One policeman was hospitalised after suffering a head injury, the interior ministry said.
The EU urged Russia to release the demonstrators "without delay" and expressed concern that police action had "prevented the exercise of basic freedoms of expression, association and peaceful assembly".
"We call on the Russian authorities to abide fully by the international commitments it has made, including in the Council of Europe... to uphold these rights and to release without delay the peaceful demonstrators that have been detained."
Britain, in a statement by its foreign office, also called on Russia to release those arrested, as the "widespread arrests in Russia contravene its international commitments to uphold citizens’ rights".
US State Department spokesman Mark Toner said the detention of "peaceful protesters, human rights observers, and journalists is an affront to core democratic values".
'Hope for a normal future'
The protests drew comparisons with the mass anti-government rallies that swept Russia in 2011 over alleged vote-rigging after a parliamentary election, which snowballed into the biggest challenge against Putin since he took power in 2000.
Navalny said Sunday that he was "proud" of the demonstrators.
"You are the country's best people and Russia's hope for a normal future," he wrote on Twitter.
Despite the scale of the protests, Russian state television news did not cover them, broadcasting soap operas and nature films instead.
The Russian constitution allows public gatherings when authorised by city authorities, but that privilege is rarely accorded to Kremlin critics.
Navalny won a surprise 27 percent of the vote in the Moscow mayoral election in 2013, and afterwards announced plans to seek the presidency.
But he has been the subject of several legal prosecutions, and in February was found guilty of embezzlement in a case he called politically motivated. He was given a five-year suspended sentence which could make him ineligible to run in next year's polls.
Navalny and his team, ignored by official media, have taken their anti-corruption campaign online, using social media to expose the hidden fortunes of high-ranking officials.
