Mr Navalny was detained on his way to a protest in central Moscow - one of more than 100 organised across the country. In the film, Medvedev was accused of benefiting from the transfer of at least $1.2 billion in funds and assets to organizations controlled by people close to the Putin ally.
With cries of "Putin out" and "Russia without thieves", mass protests took place in cities across Russian Federation on Monday - a day that was supposed to celebrate the nation.
Navalny was detained outside his home an hour before the rally was to start.
Dozens of protesters were held in the centre of St Petersburg, and more than 50 of Mr Navalny's supporters were arrested by riot police near Pushkin Square in Moscow.
But the unsanctioned rallies were raided by riot police and more than 1000 people were rounded up by officers across the country.
State media ignored the demonstrations, broadcasting Soviet-style coverage of Putin handing out state awards instead. Some of the arrests were violent with police using batons and dragging people along the street. But many say it's endemic: 45% believe Putin wouldn't succeed in fighting corruption, the highest percentage recorded in five years.
The protesters decision to disrupt a large public event was an usually strident public demonstration in Russian Federation, appearing to illustrate the emboldened attitude of those who have coalesced around Navalny's calls for protest. Similar crowds turned out in March, rattling officials who had perceived the younger generation as largely apolitical.
As a result, once again, numerous arrests were made Monday.
Demonstrators in Monday's opposition protests across Russian Federation say they are fed up with endemic corruption among officials.
Demonstrations were being held or planned in more than 200 cities and towns to protest what Navalny says is a system of corruption and cronyism that President Vladimir Putin presides over. Navalny was fined and jailed for 15 days for his role in those protests. The protest was eventually dispersed after police charged repeatedly into the crowd, dragging demonstrators at random to waiting vans.
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Police detain Russian opposition activist Ilya Yashin in Moscow Monday.
By calling people to an unauthorised rally, Alexei Navalny knew he was risking a confrontation.
Mr Navalny was jailed in March after he organised massive anti-government protests across Russian Federation.
According to Open Russia, a civil society organization led by former oil tycoon and well-known dissident Mikhail Khodorkovsky, more than 400 have been detained in Moscow, with arrests continuing there and in St. Petersburg.
"I want changes", Mr Navalny wrote in a blog post last week. Navalny has convictions for disobeying a police officer, for which he was jailed, and of embezzlement, for which he was given a 5-year suspended sentence.
More than 1,000 people have been arrested across Russian Federation.
An Associated Press reporter saw about 50 protesters seized by police in the gathering at Mars Field.
A regional security official, Vladimir Chernikov, told Ekho Moskvy radio that police would not interfere with demonstrators on the street - as long as they did not carry placards or shout slogans.
Monday's protests were widely anticipated.
Electricity in his office was cut at around the same time as he was detained, briefly bringing down a live feed of nationwide protests, Navalny's spokeswoman said. There was no immediate statement from police.
Mr Navalny called for the protests and was arrested outside his home in Moscow while heading to one of the rallies.