Launching a campaign of civil disobedience that raises the stakes in Mexico's political crisis, supporters of Andres Manuel Lopez Obrador seized control overnight of a 10 kilometre stretch of Reforma Boulevard and Zocalo Square.
The protest caused chaos, with huge traffic jams blocking major peak hour routes in an already congested city.
Office workers running late for work hurried along Reforma, a wide, tree-lined avenue that is home to the US embassy, many luxury hotels and headquarters of major corporations.
"I had to cancel a breakfast where I was going to close a contract for one million pesos (about A$120). Do you think I'm happy, or that I support these bastards?" said Enrique Salas, an insurance broker.
A bank security guard prevented by the protests from travelling in an armoured car walked along Reforma with a sack of money, flanked by two colleagues with shotguns.
European Union observers said they found no evidence of fraud at the election, won narrowly by conservative ruling party candidate Felipe Calderon.
Mexico split
But Mexico has a long history of vote cheating and many leftists are deeply suspicious of the electoral system.
The fight has split Mexico just six years after President Vicente Fox took power, ending seven decades of rule by an often corrupt party.
Obrador supporters set up tents and huge tarpaulin covers in the middle of Reforma and in the Zocalo square.
Once the centre of the Aztec world, the square is now the heart of modern Mexico.
Mr Obrador apologised to those who do not back his cause but said the campaign to overturn the July 2 election he narrowly lost to Mr Calderon would save Mexico's young democracy.
"We are not rebels without a cause. Even though we like being here we're only here because we have to be," Mr Obrador said.
Mr Obrador joined several hundred thousand people spending the night in tent in the square just a few yards from the National Palace, the seat of government from which he eventually hopes to rule Mexico.
Critics said the protests confirmed their fears that Mr Obrador, a former Indian welfare officer, is a rabble rouser and has little in common with moderate leftist leaders like Chilean President Michelle Bachelet.
Mr Calderon's margin of victory was just 244,000 votes, or less than 0.6 percentage points, and Mr Obrador says results from more than half of polling stations were tampered with.
A court decision is pending following Mr Obrador’s legal challenge to the election outcome.