Shops, business establishments and educational institutions remained closed in the old city and other Muslim-majority areas in Hyderabad.
State-owned Road Transport Corporation (RTC) suspended majority of its bus services while auto-rickshaws were also off the roads.
The usually busy markets around historic Charminar wore a deserted look.
Police and paramilitary forces were deployed in the communally sensitive areas to prevent any untoward incident.
Parts of Hyderabad and several towns in Telangana had also observed a shutdown Monday after Asad Owaisi was sent to jail for 14 days by a court in Sangareddy town of Medak district.
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He and other MIM leaders were booked in 2005 for preventing officials from demolishing a place of worship for road expansion. A non-bailable warrant was pending against the MP.
A shutdown is being observed in Sangareddy and other towns of Medak district, Karimnagar, Adilabad and other districts in Telangana and also in Anantapur in Rayalaseema region.
Sporadic incidents of violence were reported from different parts of Hyderabad on Monday.
Some unidentified persons attacked a RTC bus in Bahadurpura in the old city Monday night and tried to set it afire. The bus driver was injured in the incident.
As a precautionary measure, police imposed prohibitory orders in old Hyderabad, Sangareddy and other towns, banning assembly of five or more people.
MIM general secretary Ahmed Pasha Khadri said the party has not called for shutdown but it was people in districts and towns who were voluntarily keeping their shops and business establishments closed to show solidarity with Owaisi.
Police also tightened security in Nirmal town of Adilabad district, where Asad Owaisi's younger brother Akbaruddin Owaisi will be produced before the court in hate speech case. As his 14-day judicial custody is ending Tuesday, the police would produce him before the magistrate.