The rally at a designated free-speech corner in the strictly controlled city-state was the first public protest since the feud burst into the open on June 14.
The prime minister's younger siblings, Hsien Yang, 60, and Wei Ling, 62, have accused him of nepotism and abuse of power in a row that has prompted outrage on social media.
The spat is centred on a dispute about plans for their late father's home, a century-old bungalow.
But the prime minister's siblings say their brother is attempting to block the house's demolition to capitalise on their father's legacy for his own political agenda, including grooming his own son as a future leader.
Lee, 65, has denied the allegations but said he would not sue his siblings.
Organisers estimated the number of protesters at 600, but an AFP reporter counted around 300.
A banner hanging on a stage read: "Singapore belongs to Singaporeans and not to the Familee", referring to the Lee family, which has provided two out of three of Singapore's premiers in the five decades since independence.
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