Maina Njenga says he read the Bible and turned to Christianity while in jail
Crowds in Kenya's capital, Nairobi, have welcomed the release from prison of a notorious gang leader.
Maina Njenga, chairman of the Mungiki sect, was freed after the state withdrew murder charges for lack of evidence, a prosecutor said.
He had been charged with the killings of villagers in central Kenya in April.
Earlier this week, he had demanded state protection to give evidence against government officials allegedly involved in the sect's activities.
The Mungiki, a secretive sect mainly from Kenya's largest ethnic group, the Kikuyu, are seen as Kenya's version of the mafia.
Mr Njenga had originally been jailed in 2007 over his alleged possession drugs and a firearm.
He was acquitted of those charges in April and immediately rearrested and charged in connection with the murders of 29 people in the central Kenyan town of Karatina.
The head of public prosecution, Keriako Tobiko, said that after a thorough review of the evidence, it was concluded "that there was no evidence to sustain the murder charge".
The BBC's Ruth Nesoba said after his release Mr Njenga denounced the sect and declared that he was now a born-again Christian.
Banned in 2002
Thought to be ethnic Kikuyu militants
Mungiki means multitude in Kikuyu
Inspired by the Mau Mau rebellion of the 1950s
Claim to have more than 1m followers
Promote female circumcision and oath-taking
Believed to be linked to high-profile politicians
Control public transport routes, extorting money
Blamed for revenge murders in the central region
"I had a very good time [in jail] to study the Bible that is why now I will come to you like a professor of the Bible," he told a big church service.
Hundreds of Mungiki followers were in the church, easily identifiable by their characteristic dreadlocks, our reporter says.
"All other people that believe I am their chairman must also follow my example. They should now come to the church and start receiving salvation.
"This is not time of bringing chaos," he said, adding that charges he had been accused of "were false".
Correspondents say there is a great deal of scepticism about Mr Njenga's change of heart as other Mungiki leaders have publicly converted to Christianity in the past, but have remained involved in the gang.
The Mungiki has continued to operate despite being banned in 2002, extorting money from owners of minibus taxis and other public transport vehicles.
In 2007, more than 100 suspected sect members were killed in a police crackdown after a series of grisly beheadings blamed on the sect.
Last year the Mungiki was accused of carrying out revenge attacks after ethnic Kikuyus were killed by rival gangs in post-election violence.