"Nabeel Rajab is a prisoner of conscience and he must be immediately and unconditionally released," said Philip Luther, head of the Middle East and North Africa programme at the London-based watchdog.
"This is the Bahraini authorities’ latest attempt to clamp down on dissenting voices in the country," he said in a statement.
Rajab, who heads the Bahrain Centre for Human Rights, was arrested on Saturday at Manama airport after returning from a trip to Denmark, Sweden and Lebanon.
On Sunday, the prosecutor ordered his detention for seven days pending investigation for "insulting a statutory body via Twitter," his lawyer Mohamed al-Jishi said at the time.
The lawyer said Rajab denied the charges, saying it "aims at hindering my rights work and my right of expression."
The public prosecutor summoned Rajab for questioning after the interior ministry accused him of sending "insulting" tweets, Amnesty International said, adding that he did not attend because of his travel plans.
On Sunday also, Rajab appeared in court over charges of calling for participation in illegal gatherings during which some demonstrators acted violently.
The hearing was adjourned to May 22 while Rajab denied all charges.
Luther said that Rajab "has publically stated he is against the use of violence in protests, so the authorities have no grounds to punish him."
The activist, a member of Bahrain’s Shiite majority, has had various standoffs with police as he led protests in Manama calling for democratic change in the Sunni-ruled kingdom.
Rajab has insisted on demonstrating inside the capital, unlike the main Shiite opposition which now stages its protests in Shiite villages, after last year’s crackdown on protesters who occupied central Manama’s Pearl Square for a month.
Amnesty International says 60 people have been killed since protests erupted in Bahrain in February 2011.