The left-wing candidate in Mexico's disputed election, Andres Manuel Lopez Obrador, and his backers have blocked the capital's main square and avenues.
Mr Lopez Obrador on Sunday called on his adherents to paralyse Mexico City until every vote was recounted.
Official results from the 2 July vote gave victory to the conservative Felipe Calderon by half a percentage point.
Mr Lopez Obrador alleges vote counts were rigged - but EU monitors have said they found no irregularities.
The country's electoral court has until the end of August to rule on a recount.
Thousands of people set up camp overnight in the historic Zocalo plaza and the Reforma boulevard, blocking traffic on one of the capital's main roads.
While some set up tents and cots in preparation for a chilly night, others made do with strips of cardboard and blankets.
"The public should understand that if there isn't democracy there won't be any justice, or political stability, or peacefulness," Mr Lopez Obrador said in a speech at the camp - where he too spent the night.
Mr Lopez Obrador said he would stay until the electoral tribunal gave its ruling on the recount he is demanding.
"I know what I propose is not easy, but it is essential for our cause," he added.
Some of the largest camping sites are located opposite the US Embassy, the stock market and the Polanco hotel zone.
Local media say 1.5 million vehicles drive through the area daily, and there are fears the blockade will cause chaos in the city, which is home to some 20 million people.
Correspondents say police are unlikely to intervene, as Mexico City is governed by Mr Lopez Obrador's Democratic Revolution Party.
The blockade was set up after Mr Lopez Obrador led a mass march to the Zocalo square. Estimates of the attendance ranged from 500,000 to two million people.
As Mr Lopez Obrador rallied his supporters, ruling party candidate Felipe Calderon appeared before the electoral tribunal to argue that a full recount was unnecessary.
"I had powerful, very charismatic adversaries - but I won clearly," he told the panel of seven judges.