Puerto Rico Governor Anibal Acevedo Vila has pleaded not guilty to corruption charges at the federal court in the capital San Juan.
He faces 19 charges linked to allegations of raising and then hiding thousands of dollars in illegal election campaign contributions.
Mr Acevedo Vila is accused along with 12 of his associates.
As he arrived at court, hundreds of supporters staged a rally, waving flags and playing loud music.
The governor was freed after his court appearance, but under a pre-trial agreement must inform the authorities before travelling outside the island.
The charges relate to election campaigns between 2000 and 2004, and include conspiracy, making false statements and violation of campaign finance laws.
'Unreported debts'
The Federal Bureau of Investigation said the accused sought to defraud the government "by having Puerto Rico businessmen make illegal and unreported contributions to pay off large and unreported debts" from Mr Acevedo Vila's campaigns.
If found guilty, he could face up to 20 years in jail.
In a recent televised speech, Mr Acevedo Vila, who is running for re-election in November, accused US investigators of diverting him from resolving Puerto Rico's economic problems.
Mr Acevedo Vila has strongly opposed moves by Congress in Washington that he maintains would force Puerto Rico to lose its autonomy and become a US state.
Puerto Rico has been a US territory since the 19th Century, but gained greater autonomy in 1952.
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