The rapidly moving events mark the most serious challenge yet to the Kremlin chief's long rule and Russia's most serious security crisis since he came to power in late 1999.
Wagner chief Yevgeny Prighozin said his troops had taken control of the military command centre and an airbase in the southern city of Rostov-on-Don, and vowed to topple Moscow's top military leaders.
Responding in a televised nation address, Putin slammed his former ally -- whose private army provided some of the most successful shock troops in Moscow's offensive in Ukraine, for a "stab in the back" that posed a threat to Russia's very survival.
"Any internal turmoil is a deadly threat to our statehood and to us as a nation. This is a blow to Russia and to our people," Putin said.
"This battle, when the fate of our people is being decided, requires the unification of all forces."
"What we have been faced with is exactly betrayal. Extravagant ambitions and personal interests led to treason," Putin said, referring to Prigozhin, who built a powerbase as a catering contractor to the Kremlin, and now runs a powerful private military force.
"All those who consciously stood on the path of betrayal, who prepared an armed rebellion, stood on the path of blackmail and terrorist methods, will suffer inevitable punishment, before the law and before our people," Putin vowed.
The Russian president's speech came shortly after Prighozin posted a message of his own, apparently filmed in Rostov-on-Don, accusing the Russian military leadership of betrayal and failure in the ongoing battle against Ukrainian forces.
"A huge amount of territory is lost. Soldiers have been killed, three, four times more than what it says in documents shown to the top," he said, accusing military commanders of hiding the true scale of Russian losses in Ukraine from the Kremlin.
"Military sites in Rostov, including an aerodrome, are under control," he said, adding that warplanes taking part in the Ukraine offensive "are leaving as normal".
"We are dying for the Russian people," he said, in an earlier audio message. "All of us are ready to die. All 25,000, and then another 25,000 ... We will destroy everything that stands in our way."
Russia's headquarters in Rostov-on-Don is a key logistical base for its offensive in Ukraine.
Videos and pictures posted online, including by the TASS state-run news agency, showed armed men surrounding administrative buildings in Rostov and tanks deployed in the city centre. It was not clear who the armed men were.
The mayor of Moscow announced that "anti-terrorist" measures were being taken in the capital and its environs and authorities said security had been tightened in several regions.
The FSB security service accused Prigozhin of attempting to launch a "civil conflict" and urged Wagner fighters to detain him.
Russia's defence ministry appealed to Wagner fighters to "show reason" and abandon Prigozhin, saying it would "guarantee the safety" of those who did so.
In Moscow, critical facilities were "under reinforced protection", TASS reported, citing a law enforcement source.
Prosecutor General Igor Krasnov had informed Putin of "the initiation of a criminal case in connection with an attempt to organise an armed rebellion", Kremlin spokesman Peskov said.
Ahead of his revolt, Prigozhin accused Moscow of targeting his forces with missile strikes that he said killed "a huge number of our fighters".
"The council of commanders of PMC Wagner has made a decision, the evil that the military leadership of the country brings must be stopped," he said in a series of furious audio messages released by his spokespeople.
He warned Russians against resisting his forces and called on them to join him.
"We need to put an end to this mess," he said, adding, "this is not a military coup, but a march of justice."
While Prigozhin's outfit fought at the forefront of Russia's offensive in Ukraine, in recent months it has engaged in a bitter feud with Moscow's military leadership.
He has repeatedly blamed Defence Minister Sergei Shoigu and Valery Gerasimov, chief of the general staff, for his fighters' deaths.
'Urge You To Stop'
The Russian defence ministry warned that Ukrainian troops were taking advantage of the infighting to ready an assault near the eastern hotspot of Bakhmut.
A prominent Russian general urged Prigozhin to call off efforts to remove the defence ministry leadership.
"I urge you to stop," Sergei Surovikin, commander of Russia's aerospace forces, said in a highly unusual video address.
"Before it is too late, it is necessary... to obey the will and order of the popularly elected president of the Russian Federation."
Anti-Kremlin figure Mikhail Khodorkovsky, however, urged Russians to support Prigozhin, saying it was acceptable to back "even the devil" in taking on the Kremlin.
Washington-based think tank the Institute for the Study of War said the Wagner chief's attempt to force a leadership change in the defence ministry "is unlikely to succeed" given that Surovikin had denounced his call for rebellion.
However, it said Wagner's apparent capture of Rostov-on-Don "would have significant impacts on Russia's war effort in Ukraine".
Kyiv's defence ministry said it was monitoring the situation while Mykhailo Podolyak, a senior aide to Ukraine's president, said on Twitter that "everything is just beginning in Russia".
Ukraine was also on high alert after a fresh barrage of Russian missiles Saturday, with casualties and damage reported in Kyiv and the central city of Dnipro.
US President Joe Biden was briefed on the situation in Russia and Washington "will be consulting with allies and partners on these developments", National Security Council spokesman Adam Hodge said.
France and Germany said they were closely following the events.
Questioning Military Operation
After years of operating in the shadows, Prigozhin eventually admitted last year to running the elusive mercenary group Wagner and even interfering in US elections.
His forces, bolstered by tens of thousands of prison recruits, played a central role in Russia's capture of Bakhmut in the longest and bloodiest battle of the conflict.
However, this week he accused Moscow's top brass of deceiving Russians about the offensive in Ukraine.
"Why did the special military operation begin?" he said. "The war was needed for the self-promotion of a bunch of bastards."