Police briefly fired tear gas canisters and rubber bullets prompting many of the protesters to flee the square into Gezi Park, where many had been camping.
Some of the activists fired fireworks, fire bombs and stones at police water cannon.
Earlier, demonstrators had manned the barricades and prepared for a possible intervention when officers began massing in the area.
Police began taking down large banners that had been hung by protesters on a large building on the edge of the square, replacing them with a large Turkish flag and a banner with the picture of Mustafa Kemal Ataturk, the beloved founder of the secular republic 89 years ago after the collapse of the Ottoman Empire.
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Turkey's most widespread anti-government protests in decades erupted on May 31 after a violent police crackdown on a peaceful sit-in by protesters objecting to a project replacing the park with a replica Ottoman-era barracks.
Prior to the police action, the protests appeared to be diminishing, with the smallest number of demonstrators in the past 12 days gathering in Taksim last night. The protesters occupying Gezi Park had remained, however.
Three people have died and more than 5,000 have been treated for injuries or the effects of gas during the protests. The government says 600 police officers have also been injured.
Prime Minister Recep Tayyip Erdogan had said he would meet with the Gezi Park protesters tomorrow, following a request by some of the protesters.