The demonstrators called for the release of Mussallam al-Barrak, a former MP who last week started serving a two-year jail term on charges of insulting the ruler.
Several former opposition lawmakers led some 2,000 people, including women, who gathered outside parliament in the largest opposition rally in about nine months.
The gathering passed off peacefully.
"This is the beginning of a new phase of protests. The opposition plans to stage a similar gathering every Monday," former opposition MP Bader al-Dahoum told AFP.
"Our demands are the release of Barrak and other jailed activists, dissolving parliament and the government, scrapping the electoral law and holding fresh polls," Dahoum said.
Youth activists sang national songs calling for constitutional reforms and describing parliament as a "puppet assembly."
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Protesters carried a large banner with portraits of Barrak and several other jailed activists that read: "We will not let you down."
The supreme court on Monday began to study an appeal by Barrak but delayed a decision on whether to release him on bail until next week, his lawyer Thamer al-Jadaei told AFP.
The charges against Barrak relate to a speech he gave to tens of thousands of demonstrators at the same venue in October 2012 against changes to the electoral law that he said would allow the ruling Al-Sabah family to manipulate the outcome of elections.
Barrak was a member of parliament at the time but his nationalist Popular Action Movement (PAM) boycotted December 2012 and July 2013 polls held under the new electoral law.
In July last year, street protests broke out when Barrak was detained for five days on separate charges of insulting the judiciary.
Since the mass demonstrations of 2012 by tens of thousands of people, Kuwaiti authorities have cracked down on the opposition. Dozens have been tried and handed heavy jail terms.
The government revoked the citizenship of several opposition figures including PAM spokesman Saad al-Ajmi last September.
The crackdown has been condemned by human rights groups, who have called for changes to the law to prevent people being jailed for exercising free speech.