Police said officers responded Sunday afternoon to reports of a dangerous driver near Major Mackenzie Drive West and Yonge Street, where a protest was taking place.
According to police, the suspect struck a food delivery driver who was not involved in the demonstration and hit another vehicle while fleeing the scene. He then stopped his car and yelled threats at demonstrators before being arrested.
The delivery driver was taken to hospital with minor injuries.
Police identified the suspect as 39-year-old Mehran Mohagheghi of Richmond Hill. He faces charges including assault with a weapon, dangerous operation, uttering threats and failure to stop after an accident.
Authorities said the investigation remains ongoing and appealed for witnesses and video footage to come forward.
The incident comes amid heightened tensions at Iranian diaspora demonstrations across North America and Europe since the January protests and crackdown inside Iran.
Rallies linked to the conflict have increasingly drawn sharp confrontations not only between supporters and opponents of the Islamic Republic, but also among rival opposition factions divided over strategy, leadership and foreign involvement.
Earlier this year, a vehicle drove into a crowd during a large anti-government rally in Los Angeles, injuring several protesters and prompting a police investigation.
Smaller scuffles and confrontations have also been reported at demonstrations in cities including London, Berlin and Paris in recent months.
