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It was not clear who carried out the killing, but the ruling Ennahda party, a moderate Islamist group, was forced to deny accusations from his family that it had been involved.
Police in Tunis fired tear gas to disperse scores of demonstrators who tried to set up a tent for a sit-in calling for the fall of the regime. Union leaders have called for a general strike on Friday.
Brahmi, 58, of the leftist Popular Movement, was shot dead outside his home in Ariana, near Tunis, Watanya state television and the official TAP news agency reported.
"He was riddled with bullets in front of his wife and children," Mohsen Nabti, a fellow member of the small movement, said in a tearful account aired on Tunisian radio.
Watanya said Brahmi was struck by 11 bullets fired at point-blank range.
The February 6 assassination of Chokri Belaid, another opposition figure, also outside his home, sparked a political crisis in Tunisia and charges of government connivance.
The family of father-of-five Brahmi accused Ennahda of being behind both murders.
"I accuse Ennahda. It was them who killed him," the MP's sister Chhiba Brahmi told AFP at the family home in Sidi Bouzid, without providing any evidence.
"Our family had the feeling that Mohamed would suffer the same fate as Chokri Belaid," whose family also blamed the authorities, she said.
Ennahda chief Rached Ghannouchi rejected the charge in a statement to AFP, calling Brahmi's killing "a catastrophe for Tunisia."
He added: "Those behind this crime want to lead the country towards civil war and to disrupt the democratic transition."
EU foreign policy chief Catherine Ashton condemned the killing "in the strongest terms."
She added her voice to earlier calls by UN human rights chief Navi Pillay and Amnesty International for an investigation into the killing.
The United States condemned the "cowardly" assassination.
"Violence has no place in Tunisia's democratic transition," State Department deputy spokeswoman Marie Harf said.
Brahmi was elected MP in October 2011 for Sidi Bouzid, birthplace of the revolution earlier that year that toppled president Zine El Abidine Ben Ali.
On July 7, he resigned as general secretary of the Popular Movement, which he founded, saying it had been infiltrated by Islamists.
-- 'Down with the Brothers' --
In Tunis, angry demonstrators took to the streets to denounce the ruling Islamists.
"Tunisia is free, Brotherhood out!" they chanted, referring to the Muslim Brotherhood-linked Ennahda.
"Ghannouchi murderer!" they shouted.
In Sidi Bouzid, crowds chanted "Down with the Brothers, down with the people's torturers!"
Thousands also protested in nearby Menzel Bouzaine, where Ennahda party offices were set ablaze.
Prime Minister Ali Larayedh, himself an Islamist, told reporters: "I condemn in the strongest terms this odious crime which targets the whole of Tunisia and its security."
He also called for calm.
"This drama must not be exploited to sow trouble," he said. "Only minutes after news of the murder was announced, calls were made inciting Tunisians to kill each other."
President Moncef Marzouki said the killing was aimed at derailing the Arab Spring, and called it a "second national catastrophe" after Belaid's murder.
President Francois Hollande of France, the pre-independence colonial power in Tunisia, called on the country to unite.
But he also called for "light to be shed as quickly as possible" on the murders of both Brahmi and Belaid.
On Wednesday, a minister and senior adviser to Larayedh said six people believed to have orchestrated Belaid's killing had been identified.
Noureddin B'Hiri said the details would be revealed "soon."
The General Union of Tunisian Labour (UGTT) meanwhile called for a general strike across Tunisia on Friday in protest at "terrorism, violence and murders."
The union last called a two-hour general strike on January 14, 2011, the day Ben Ali fell.
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Police in Tunis fired tear gas to disperse scores of demonstrators who tried to set up a tent for a sit-in calling for the fall of the regime. Union leaders have called for a general strike on Friday.
Brahmi, 58, of the leftist Popular Movement, was shot dead outside his home in Ariana, near Tunis, Watanya state television and the official TAP news agency reported.
"He was riddled with bullets in front of his wife and children," Mohsen Nabti, a fellow member of the small movement, said in a tearful account aired on Tunisian radio.
Watanya said Brahmi was struck by 11 bullets fired at point-blank range.
The February 6 assassination of Chokri Belaid, another opposition figure, also outside his home, sparked a political crisis in Tunisia and charges of government connivance.
The family of father-of-five Brahmi accused Ennahda of being behind both murders.
"I accuse Ennahda. It was them who killed him," the MP's sister Chhiba Brahmi told AFP at the family home in Sidi Bouzid, without providing any evidence.
"Our family had the feeling that Mohamed would suffer the same fate as Chokri Belaid," whose family also blamed the authorities, she said.
Ennahda chief Rached Ghannouchi rejected the charge in a statement to AFP, calling Brahmi's killing "a catastrophe for Tunisia."
He added: "Those behind this crime want to lead the country towards civil war and to disrupt the democratic transition."
EU foreign policy chief Catherine Ashton condemned the killing "in the strongest terms."
She added her voice to earlier calls by UN human rights chief Navi Pillay and Amnesty International for an investigation into the killing.
The United States condemned the "cowardly" assassination.
"Violence has no place in Tunisia's democratic transition," State Department deputy spokeswoman Marie Harf said.
Brahmi was elected MP in October 2011 for Sidi Bouzid, birthplace of the revolution earlier that year that toppled president Zine El Abidine Ben Ali.
On July 7, he resigned as general secretary of the Popular Movement, which he founded, saying it had been infiltrated by Islamists.
-- 'Down with the Brothers' --
In Tunis, angry demonstrators took to the streets to denounce the ruling Islamists.
"Tunisia is free, Brotherhood out!" they chanted, referring to the Muslim Brotherhood-linked Ennahda.
"Ghannouchi murderer!" they shouted.
In Sidi Bouzid, crowds chanted "Down with the Brothers, down with the people's torturers!"
Thousands also protested in nearby Menzel Bouzaine, where Ennahda party offices were set ablaze.
Prime Minister Ali Larayedh, himself an Islamist, told reporters: "I condemn in the strongest terms this odious crime which targets the whole of Tunisia and its security."
He also called for calm.
"This drama must not be exploited to sow trouble," he said. "Only minutes after news of the murder was announced, calls were made inciting Tunisians to kill each other."
President Moncef Marzouki said the killing was aimed at derailing the Arab Spring, and called it a "second national catastrophe" after Belaid's murder.
President Francois Hollande of France, the pre-independence colonial power in Tunisia, called on the country to unite.
But he also called for "light to be shed as quickly as possible" on the murders of both Brahmi and Belaid.
On Wednesday, a minister and senior adviser to Larayedh said six people believed to have orchestrated Belaid's killing had been identified.
Noureddin B'Hiri said the details would be revealed "soon."
The General Union of Tunisian Labour (UGTT) meanwhile called for a general strike across Tunisia on Friday in protest at "terrorism, violence and murders."
The union last called a two-hour general strike on January 14, 2011, the day Ben Ali fell.
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