The children, along with teachers and activists, were demonstrating after the playground was walled off during the holidays, said Boniface Mwangi, who participated in the protest.
The playground, near the Langata Primary School, had reportedly been confiscated for the construction of a parking lot.
Video showed students and activists pushing, kicking and hitting the wall with planks of wood.
Children wearing their green school sweaters held signs calling the seizure of the playground "terror against children" and Kenya "the land of shameless grabbers." Some of the students taking part were as young as 6, Mwangi said.
Riot police responded to the demonstration by unleashing plumes of tear gas that sent the children fleeing in panic.
'Laptops not canisters of tear gas'
As news of the police's actions spread, thousands of people voiced anger on social media, using the hashtag #OccupyPlayGround.
Children were "promised laptops not canisters of tear gas," tweeted former Kenyan Vice President Kalonzo Musyoka. "Someone must be held accountable."
Some children were treated in hospital after the incident, Mwangi said. At least one police officer was also hurt.
Kenyan media reported that the police officer in charge of the operation at the playground has been suspended. Police didn't respond to CNN's request for comment.
'They came back to get their playground'
Some people on social media blamed the adult activists for the chaotic scenes.
"What has #OccupyPlayGround achieved apart from crying terrorised children, activists pushing agenda via kids?" wrote a Twitter user on the handle @SnrMbatha.
But Mwangi disputed that claim.
"This is kids' action," he said. "They want back their playground and they came back to get their playground."
The children were set to go back to school Tuesday.
But not without the memory of what Mwangi called "a dark, sad day for Kenya."