A peaceful march through the town by anti-capitalism activists, opponents of globalisation, environmentalists and other groups turned violent after some of the protesters threw bottles and a fire extinguisher at police officials when they were stopped at a barricade blocking access to the road leading to the Elmau Castle Hotel, the summit venue.
Police responded using teargas, pepper spray and batons against the demonstrators. Several people were injured on both sides in the clashes last evening, police said.
It held the police responsible for the confrontation and vowed to continue the protest marches until the G7 leaders leave the area.
The Transatlantic Trade and Investment Partnership (TTIP), which has been under negotiation between the EU and the United States for over a year and the plans for fracking in Europe are among the targets of the anti-G7 demonstrators.
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They are also demanding the richest nations to take concrete measures to combat climate change, to promote fair trade and food security, to reduce poverty worldwide and to rescue migrants from Africa and the Middle East taking a perilous journey across the Mediterranean to reach Europe.
Over 19,000 police personnel have been deployed to ensure the security of the G7 leaders and a 16 kilometre-long wire fence has been erected around the the summit venue on the foothills of the Bavarian Alps to keep the protesters at bay.
The second G7 summit to be hosted by chancellor Angela Merkel since taking office in 2005 will be attended by US President Barack Obama, British Prime Minister David Cameron, French President Francois Hollande, Italian Prime Minister Matteo Renzi, Canadian Prime Minister Stephen Harper and Japanese Prime Minister Shinzo Abe.
The G8 returned to its original format after Russia was excluded from the group following its annexation of Ukraine's Crimean peninsula in March, last year.