The health ministry said one person died, a figure later echoed by the army, and 71 people were hurt -- some from bullet wounds and others suffering breathing difficulties or having been struck during clashes.
Medics said two people were killed and 18 people wounded.
The fatality was the first in the square since it became the focal point for 18 days of protests that triggered president Hosni Mubarak's resignation on February 11.
The army denied it was responsible for the fatality, saying no deaths were discovered when it cleared the square to enforce a pre-dawn three hour curfew.
Instead, four soldiers and nine protesters were wounded, said a military spokesman who vowed to clear the square of protesters who defied the curfew.
"Those who remain in the square will be dispersed," General Ismail Etman told reporters. The warning was ignored by protesters in Tahrir, who chanted against the military.
"I'm not scared, I'm sad it came to this, but what right does the army have to attack us," said one protester, Mohammed Abdel Al, as he prepared to take a nap on the square.
Etman defended the military's actions the night before. "We did not use force; we did not beat anyone," he said. Any protesters hurt had been hit with stones thrown by others, he added.
For his part, General Adel Umara said that after the army cleared and left the square in the morning, a large number of "protesters came ... to Tahrir with two automatic weapons and Molotov cocktails, and they attacked three military vehicles."
He did not explain why the vehicles were left behind.
"There was a death reported, unfortunately. An initial autopsy shows it was a bullet in the mouth," the general said. He did not identify the fatality.
On Friday, tens of thousands had massed in the square calling for Mubarak and his cronies to be tried for corruption and criticising the military rulers for stalling on reforms in what was dubbed the "Day of Trial and Cleansing."
Some were also demanding that 75-year-old Field Marshall Hussein Tantawi, Mubarak's defence minister for two decades and the man who replaced him, also step down.
Several hundred camped out in the square overnight, and witnesses said soldiers, backed by riot police, fired live rounds, mostly into the air, and beat protesters.
Earlier, the interim military government said "elements from the interior ministry," backed by civilians, had cleared "outlaws" from the square, in a statement carried by the official MENA news agency.
A statement on the military's Facebook page blamed remnants of the formerly ruling National Democratic Party for the demonstration, and said it had ordered the arrest of four party members it accused of "thuggery" during the sit-in.
Cairo remains under a 2:00 am to 5:00 am curfew.
An officer said "we did not fire live bullets," adding that an inquiry was underway.
Earlier, an official said the army had used only blanks.
Those claims were repeated by General Umara.
Seven army officers had defied a warning from the ruling military council and joined the protesters on Friday, calling for a "purification" of the army.
"Our demands are your demands. We want a civilian government. We want to try corrupt people," one officer said to loud cheers.
At midnight (2200 GMT) on Friday, the officers gathered in a tent surrounded by more than a dozen protesters who wanted to guard them against arrest.
General Etman said 42 people had been arrested, including the officers.
The army withdrew from the square in the morning, prompting the swift return of at least 200 protesters. By the afternoon that figure had swelled to around a thousand.
A military bus was still in flames, and stones and bullet casings littered the ground from the overnight violence.
The protesters were calling for Tantawi's overthrow and said they would remain in the square until he quit.
The demonstrators cordoned off entrances to the square with barbed wire abandoned by military police.
The mood was tense and decidedly anti-military.
Some protesters surrounded a man who objected to their presence, pummelling him with punches and kicks before other demonstrators intervened.
"I've come to Tahrir Square because we are witnessing a counter-revolution," student Malik Asam told AFP.
Another student, Anas Mohammed, said: "I had expected to see the other face of the military, but if they carry on as they are, they will see the other face of the people."
That was an apparent reference to the army's stance during the anti-Mubarak protests, when it said the demonstrators' demands were just and protected them from pro-regime elements who tried to drive them out of the square.
Mubarak, his wife Suzanne and their two sons Alaa and Gamal and their wives have already been banned from travel and had their assets frozen.
Several former ministers and members of Mubarak's National Democratic Party are being investigated as part of a sweeping probe, but pro-democracy activists say key figures still need to be brought to justice.
On Thursday, Mubarak's chief of staff Zakariah Azmi was detained for 15 days on suspicion of illegally acquiring his wealth.
The army has promised legislative and presidential elections before the end of the year and a return to civilian rule, but many Egyptians are concerned that key elements of the old regime are still firmly entrenched.
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