About 1,000 far-right youths with signs demanding "work for Germans first" listened to speakers calling for foreigners to be expelled.
Sixteen police officers and 25 protesters were injured in Berlin's Hellersdorf district during a large rally organised by the extreme-right National Democratic Party (NPD).
About 1,000 far-right youths with signs demanding "work for Germans first" listened to speakers calling for foreigners to be expelled.
Police intervened when the neo-Nazis briefly clashed with anti-fascists who held their own counter-demonstration at the same location.
"We're not looking for a fight. We want to make our protests at them being allowed to rally on May Day," an anti-fascist demonstrator said.
The NPD demonstration was authorised by a German court, which lifted a police ban, but left-wing counter-demonstrations were forbidden.
The courts said that the leftists were more likely to cause trouble.
According to Berlin police spokesman Michael Kokert, 140 leftists were arrested or detained citywide as a result of the disturbances.
Troubles elsewhere
Earlier, over 100 people were arrested and 16 police officers were hurt in an overnight riot by far-leftists in Hamburg.
Police used water cannons and armored vehicles to disperse the rioters who threw stones at banks, broke shop windows and set fire to cars in the city centre.
In Dresden, counter-demonstrators threw stones and firecrackers at a gathering of about 450 NPD supporters, and 12 of them were detained.
In Ludwigshafen, in the south-west of Germany, 400 counter-demonstrators disrupted a march by 300 NPD supporters. The NPD also demonstrated in Grimma, in the east.
Police are bracing for more violence in Berlin where they deployed more than 6,000 officers. Reinforcements were guarding government buildings in the city centre.
May Day demonstrations in past years have degenerated into street fights between radicals and the police.