World leaders, including US President George W Bush, have been flying into Sydney for the Apec summit this week.
Australian PM John Howard welcomed Mr Bush. Topics at Saturday's summit will include Iraq, security and climate change.
Various anti-war, anti-Bush and anti-globalisation protesters have gathered to demonstrate.
Other campaigners include supporters of the spiritual Falun Gong group who have staged human rights protests against Beijing.
Climate change activists urged Australia and the US to ratify the Kyoto Protocol on gas emissions.
More than 5,000 police and troops are patrolling the streets. Authorities have cleared jail cells in case of any mass arrests.
Security is high due to fears of violent protests.
Police chief superintendent Steven Cullen, head of the state Public Order and Riot Squad, believes "a full-scale riot is probable".
A 5km (three-mile) barrier has been erected across the city's central business district to shield leaders from the thousands of protesters expected.
President Bush said he was sorry about the disruption and inconvenience that his presence had caused.