The unrest erupted after a policeman allegedly killed the man and wounded two others during an argument over the price of a cup of tea.
The policeman has been arrested and the case referred to prosecutors.
Video footage showed angry protesters overturning a police vehicle while chanting "the police are thugs".
Egypt has seen a series of allegations of police brutality in recent months, stoking public anger.
The interior ministry said that Tuesday's incident in the eastern suburb of Rehab began with an argument over the price of a cup of tea between several policeman and a street vendor.
One policeman opened fire, killing the vendor and wounding two passersby, it added.
Photographs showed what appeared to be a man lying still on the floor, covered in blood, surrounded by angry onlookers.
Witnesses said the protest began shortly after the incident.
"Security forces brought in two riot police vehicles and an armoured truck and the victim's family is here and pelting them with rocks," one witness told the Reuters news agency.
"Security forces are retreating and promising justice but the crowd is demanding police hand over the killer."
In February, there was a protest outside the Cairo security directorate after a policeman reportedly shot dead a driver in a street in an argument over a fare.
There were also riots in Ismailia and the southern city of Luxor after at least three people died in police custody in a single week in November.
The government has also been forced to repeatedly deny allegations that security services were responsible for the killing of Italian academic Giulio Regeni in Cairo earlier this year.
Officials have blamed a criminal gang for his abduction and torture.
Hundreds of people have taken to the streets of Egypt's capital, Cairo, to protest after a tea vendor was allegedly shot dead by police.