The escalation in violence took place as the parliament in Kiev approved a draft constitutional amendment proposed by President Petro Poroshenko.
His decentralization plan would give more power to the eastern Ukrainian regions of Donetsk and Luhansk, which are held by the separatists.
In a televised address, Poroshenko called the bill “a difficult but a logical step toward peace,” and he insisted it wouldn’t give any autonomy to the rebels, the Associated Press reported.
He described the clashes outside parliament as an attack on him and pledged to prosecute “all political leaders” behind the violence.
Photographs and video showed the grenade emitting a trail of smoke.
Ten injured police officers were in serious condition.
There were no reports of serious injuries among the protesters.
Prime Minister Arseniy Yatsenyuk called for life imprisonment for the person who threw the grenade and said the protesters were worse than the separatist rebels because they are destroying the country from within “under the guise of patriotism,” the AP said.
“The cynicism of this crime lies in the fact that while the Russian federation and its bandits are trying and failing to destroy the Ukrainian state on the eastern front, the so-called pro-Ukrainian political forces are trying to open another front in the country’s midst,” he said.
The nationalist Svoboda party that led Monday's unrest blamed the government, saying it “provoked Ukrainians to protest” by presenting a bill tantamount to “capitulation to the Kremlin.”
The legislation, if approved, would allow some communities in eastern Ukraine to take ownership of state assets and natural resources.
The amendment would permit Ukraine's president to overrule local authorities to protect national sovereignty.
Critics of the plan, including the far-right Svoboda and Right Sector parties, say the bill would give too much power to the separatists waging war against Ukrainian security forces.
“This is not a road to peace and not a road to decentralization,” said former prime minister Yulia Tymoshenko, the leader of another party that opposes the measure.
“This is the diametrically opposite process, which will lead to the loss of new territories.”
Supporters argue that Donetsk and Luhansk will benefit from the decentralization of power, which was a condition of the Minsk agreement in February that formally ended major combat between Ukraine's military and the separatists.
Despite evidence of Russian weapons and military troops fighting alongside the self-described rebels, Russia has consistently denied any involvement.
More than 6,900 people have died in Ukraine conflict that began last year and is still active in places despite the cease-fire signed in February.
A final vote on the amendment is likely during the parliament's fall session, which starts Tuesday.
The Svoboda party holds only a handful of seats in the parliament.