The protesters turned out in response to a call initiated by hardline Salafist leader Wesam Abdel-Wareth to protest the low-production movie said to be offensive to Prophet Mohammad.
The film has been produced by expatriate members of Egypt's Christian minority resident in the United States.
The protesters brought down the US flag, burnt it and attempted to replace it by a black flag inscribed with: "There is no God but Allah and Mohammed is His prophet".
The protesters were from different backgrounds, most of them were from the hardline Salafi movement, but also among the protesters were supporters of the Mina Daniel leftist movement, and the increasingly politicised football hooligans known as the Ultras.
The protests were also joined in by women wearing veils.
The movie is said to be an old one, but a hardline television channel took up the issue a couple of days back, fanning the fire.
The US confirmed that the embassy had been breached and the American flag tore down.
"We had some people breach the wall, take the flag down and replace it," State Department spokeswoman Victoria Nuland said.
Asked if the protesters had replaced the US flag with an Al-Qaeda flag, Nuland said she was not sure.
"What I heard was that it was replaced with a... Plain black flag. But I may not be correct in that," she said.
The protests came on a day when the US was observing the 11th anniversary of the September 11 attacks.
Egyptian activist Wael Ghoneim wrote on his Facebook page that "attacking the US embassy on September 11 and raising flags linked to al-Qaeda will not be understood by the American public as a protest over the film about the prophet.
"Instead, it will be received as a celebration of the crime that took place on September 11," he said.
