"We have released all of them," national police spokesman Ramli Yoosuf told AFP on Sunday, adding that the MP had been identified as Tian Chua from Anwar Ibrahim's Keadilan party.
Security forces would decide later whether to file charges against the demonstrators, he said.
Police fired tear gas and chemical-laced water Saturday at thousands of protesters calling for clean elections after some breached into the Merdeka (Independence) Square which had been declared a banned area for demonstrators.
Police estimated at least 30,000 people participated in the rally, while independent Malaysian media put the number at more than twice that.
The street protest – a rare event in Malaysia – was held in the capital Kuala Lumpur by a coalition known as Bersih, or clean, in Malay language.
It is pressing the government to review the country's election system and clean up the electoral roll before the next elections expected in the coming months.
But Prime Minister Najib Razak denied any electoral bias.
"We do not want to be elected through cheating. We are a government chosen by the people," he said.
Speculation is rife that Najib could call polls as early as June, and Bersih is demanding elections be postponed until full reforms are implemented.