The overnight protests were described by police as the most violent demonstrations Germany's capital has seen in more than five years.
About 3,500 protesters marched through Friedrichshain on Saturday.
Some were masked and threw missiles, police said.
Police fired tear gas as shop windows were broken and police cars damaged.Tensions have risen since moves began in June to evict squatters in the area.
“During the operation conducted by roughly 1,800 police forces…123 police officers were injured,” the police said in a statement on Sunday.
“Police officers initiated over 100 criminal proceedings for serious civil disorder, disobedience to police officers, putting on face covers, attempting to free detained people, serious physical assault and violations of the explosive law.”
Friedrichshain has undergone rapid gentrification in recent years.
Squatters refuse to leave part of a block of flats at 94 Rigaer Strasse.
Many of those who live in neighbouring housing collectives sympathise with the squatters, who see themselves as a left-wing alternative to gentrification and rising rents.