Bahrain's opposition party Al-Wefaq and the Bahrain Youth Society for Human Rights said the man, identified as Salah Abbas Habib Musa, took part in a peaceful protest Friday evening that was violently broken up by security forces.
His body was found early Saturday on a farm in a village outside the capital of Manama.
The interior ministry said the public prosecutor had launched an investigation into the 36-year-old man's death.
He was "pronounced dead at the scene, with a wound to his left side" and will undergo an autopsy, the interior ministry statement said. "The investigation is ongoing but the death is being treated as homicide," it said.
Police and protesters clashed in the area Friday night, witnesses told the Bahrain Youth Society for Human Rights, with security forces using of tear gas, bird shot and stun grenades. Several protesters were detained by riot police, the witnesses said.
The ministry appealed for people to await the results of the autopsy rather than heeding speculation on social media about how the man died.
"The government condemns all acts of violence and will ensure the perpetrators of this crime, whoever they may be, will be brought to justice," said public security chief Maj. Gen. Tariq al Hassan.