The protesters blame Germany's influx of refugees for a spate of sexual assaults against women at New Year's Eve celebrations in Cologne.
Meanwhile, Germany has announced tougher deportation laws as pressure on the government grows over the attacks.
Far-right supporters in the eastern German city of Leipzig went on a rampage, vandalising buildings and setting cars on fire.
They're angry over assaults on women in Cologne on New Year's Eve, allegedly by gangs of young migrant men.
The riots began around the same time that more than 2,000 supporters of the anti-Islamic PEGIDA movement demonstrated nearby.
Protester Olaf Spermer says he's concerned about how the New Year's Eve incident has been handled.
"Especially what annoyed us in the past weeks and months, was the whole situation regarding foreigners, that how things were handled and not only I, but many people, think that it will all end in a very bad way."
Counter-demonstrators, like Miriam Schoene, held candles and asked for better integration measures.
"We should in no way generalise. But it is also important that we all take part in the integration process. What happened in Cologne should not be underestimated but still we should not blame the bigger crowd for what a small group did."
Police in Cologne say more than 500 criminal complaints have been filed by women in relation to the assaults on New Year's Eve.
A total of 19 suspects have been identified; all of them foreigners, many of them recent arrivals.
The attacks have triggered a furious debate about Chancellor Angela Merkel's immigration policy which saw 1.1 million asylum seekers come to Germany last year.
Germany's Interior Minister Thomas de Maiziere has propose tougher deportation and sex offence laws following the violence.
"Regarding the question of when someone is no longer recognised as a refugee, so far the regulation said three years prison sentence without probation. For the crimes I mentioned, that is life-threatening crimes, crimes against bodily harm, sexual self-determination, property offences using violence or serial offences against property or attacks against police, we are lowering the hurdle from three (years) to one year."
Germany's Justice Minister, Heiko Maas, says no-one is above the law.
"This is nothing else but the protection of victims. We owe that to the victims of these serious crimes. However, it is not only reasonable but also necessary in my view, to protect the innocent overall majority of refugees in Germany. They have not deserved to be put in the same pot as criminal foreigners."
Meanwhile, a German state has launched a program to teach refugees the basics of law in their new host country.
About 800 judges, prosecutors and judicial officials will take part as their teachers.
The classes in the southern state of Bavaria were planned before the New Year's Eve assaults on women in Cologne.
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