Around 2,500 protesters from the radical Muslim group Hizbut Tahrir shouted "Reject Obama" and "America is Terrorist" outside the US embassy as they brandished banners with slogans such as "Reject Obama, Reject Capitalism, Reject Imperialism."
"We strongly oppose America and Obama coming to Indonesia," the group's spokesman Mujiyanto told AFP.
"Obama is a murderer of our Muslim brothers in Palestine and Afghanistan, a thief of Indonesia's natural resources, and an imperialist who seeks to take over the world and will do anything for US interests," he added.
Similar protests were also held Sunday in other cities, including Surabaya in East Java and Makassar in South Sulawesi.
Obama will be in Indonesia for the 18-nation East Asia Summit at the end of the week.
The 10-member Association of Southeast Asian Nations (ASEAN) summit, with observing nations including the United States attending, is also taking place this week.
The delegates are meeting to discuss major regional issues, such as territorial clashes in the South China Sea and the Myanmar's bid to take over Indonesia's role as ASEAN chair in 2014.
Radical groups like Hizbut Tahrir have little popular support in the archipelago of 240 million people.
Indonesia, the most populous Muslim-majority country in the world, is constitutionally secular and culturally moderate.