The far-right leader was convicted of plotting a coup to stop President Luiz Inacio Lula da Silva from taking office after the 2022 election.
Under the bill, which the Senate will consider on Wednesday, Bolsonaro could be granted parole just over two years into his 27-year sentence.
The marches were called by left-wing groups and activists after the conservative-controlled lower chamber of Congress passed the measure early Wednesday morning.
In Rio de Janeiro, nearly 19,000 people flooded the famed Copacabana Beach with banners reading “No amnesty” and “Congress, enemy of the people”.
Iconic singer Caetano Veloso and other musicians performed on a small stage at the protest.
“We are still here to wake up Congress,” shouted actress Fernanda Torres.
“We are still here for Brazil’s forests, for women’s rights, for democracy. We are still here!”
In the megalopolis of Sao Paulo, an estimated 14,000 people filled the iconic Paulista Avenue.
“We are on the streets to say that we continue to defend our democracy, and defending democracy means saying that the coup leader belongs in jail,” Sao Paulo city councilor Keit Lima told AFP.
Protesters also marched in the capital Brasilia, from the National Museum to Congress.
If passed, the bill would also benefit supporters of Bolsonaro who were imprisoned for storming government buildings shortly after Lula took office.
The sentence reduction bill resurfaced this week, a few days after Bolsonaro anointed his son, Senator Flavio Bolsonaro, as his successor ahead of 2026 presidential elections.
Flavio said last Sunday he would be willing to withdraw his candidacy in exchange for amnesty for his father.
Lula could veto the bill if it passes the Senate, but Congress could vote to overturn it.
If Bolsonaro is released in two years, “we’ll have ended the legal process in the country, we will have destroyed the Constitution,” agronomist Viviane Anjos told AFP at the protest in Brasilia.
“We can’t let him out!” the 40-year-old said.