The black-and-yellow banner, placed on a building across the frozen Moscow River from the Kremlin, also showed Prime Minister Vladimir Putin’s face crossed out with an X.
Police later removed the banner -- which bore the logo of the opposition movement Solidarity -- and said they were investigating the incident.
A leader of the group said the banner faced the Kremlin because "Putin was and remains the master of the Kremlin."
"He is the constructor and ideologue of the political system that has destroyed competition in this country," Ilya Yashin wrote in his blog.
The incident follows December parliamentary elections that the opposition says were marred by fraud. It also comes ahead of a presidential election in March in which Putin is running for a third term.
-- Central Newsroom