About 50 people were demonstrating in Corowa, on the Murray River, on Saturday afternoon before police split them up.
A group of balaclava-wearing men were spotted huddled under a sign that read 'white man fight back'.
A video posted online shows the group's leader, Thomas Sewell, delivering a tirade suggesting white people are being "pushed out" of their towns.
Neo-Nazi Thomas Sewell is self-appointed leader of the National Socialist Network. (James Ross/AAP PHOTOS)
Police said no arrests were made but inquiries into the incident were ongoing.
"About 12.15pm (on Saturday) emergency services were called to Sanger Street, Corowa, following reports of an unauthorised assembly," a statement read.
"Officers attached to Murray River Police District attended and dispersed the crowd of about 50 people."
Deputy Opposition Leader Sussan Ley, who is the local federal MP, condemned the white supremacy but said she was heartened community members had made it clear to them racism had no place in Corowa.
"I am saddened this hate was forced upon members of my community, including many families who were simply enjoying their weekend, the day before the Corowa Show," she said.
"It is clear this is part of a strategy to shock and provoke using regional towns … in recent months, similar activities have been rightly shut down in our cities."
Sussan Ley says she's heartened community members made it clear racism has no place in Corowa. (Mick Tsikas/AAP PHOTOS)
On Saturday, a 65-year-old Victorian police sergeant was interviewed as part of an investigation into allegations she twice performed the Nazi salute.
She is accused of approaching two employees on Tuesday afternoon and performing the salute, as well as uttering the words "heil Hitler".
In a post family violence scenario debriefing with a recruit squad and another instructor, the sergeant again allegedly performed the salute and said "heil Hitler".
State and federal governments have banned Nazi symbols and gestures following concerns about a rise in anti-Semitism.
Neo-Nazi Jacob Hersant, 25, became the first Victorian found guilty of intentionally performing the Nazi salute in public on Tuesday.
Jacob Hersant (right) faces jail after being convicted of intentionally performing the Nazi salute. (Joel Carrett/AAP PHOTOS)
Hersant walked free from court on Wednesday but Magistrate Brett Sonnet has indicated he will be sentenced to jail on November 8.
A Sydney court was told last month three men accused of performing Nazi salutes outside an inner city Jewish museum in 2023 were joking, with one saying he was mimicking the act of British comedian Ricky Gervais.
The trio have pleaded not guilty to charges of behaving in an offensive manner in public and knowingly displaying Nazi symbols without an excuse.
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