Uttara and four other monks were greeted by hundreds of supporters outside the Yangon court, an AFP reporter said, after their release from Myanmar's notorious Insein prison.
He was arrested in a late-night swoop several days ago apparently triggered by a dispute over ownership of monastic property.
The five have not been officially charged with defaming the religion, their lawyer Aye Ko said, adding they will return for a second hearing on June 27th.
The British embassy has called on Myanmar to ensure full legal representation for Uttara, a UK passport holder who is believed to have moved to Britain in the early 1990s and was back in Myanmar on a working visit.
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AFP was not allowed into the court today, with officials citing "security" issues.
"We citizens do not accept what happened. We ask for their immediate release," said construction worker Aung Khin, 56, outside the court before the monks were freed on bail.
Details of the ownership dispute are vague, but according to a report last week in the state-run English-language newspaper New Light of Myanmar, the row stems from a 2002 decision by the then-ruling junta to hand the property over to national Buddhist authorities.