The university said in a statement Wednesday that the gathering at the student union began late Tuesday night with about 30 to 40 students, but grew within 20 minutes as word spread. Some students chanted political slogans while others used derogatory racial statements and profanity, the statement said.
The incident comes just after the 50th anniversary of violent rioting that greeted the forced integration of Ole Miss with the enrollment of its first black student, James Meredith.
Ole Miss Chancellor Dan Jones promised an investigation and said "all of us are ashamed of the few students who have negatively affected the reputations of each of us and of our university."
On Wednesday night, about 700 people held up candles and called for racial harmony outside the administrative building at the university in Oxford, countering Tuesday's protest over Obama's re-election.
Police were initially alerted to Tuesday's uproar by people who saw Twitter posts about it. The students were told to leave, but about 100 came back later. One person was charged with public intoxication and another with failure to comply with police orders. There were no reports of injuries or property damage.
Rumors about the situation were fueled on Twitter after the university's student journalists posted a video referring to the gathering as "riots." The student newspaper posted a video of the crowd, but much of what the students said in it is unintelligible other than the "Hotty Toddy" cheer, which is common at football games and other school gatherings.
One picture that spread rapidly on social media shows people burning an Obama campaign sign, but the university hasn't confirmed that the picture was taken on campus. The chancellor said some photos shared on social media showed things that were not seen by police on campus, but the reports of uncivil language and racial slurs appeared to be accurate.
Some students and teachers used social media to condemn the conflict.
Ellen Meacham, an Ole Miss journalism instructor, posted on Facebook that "anyone who calls that a riot has never read or heard anything about 1962."
She was referring to when Meredith became the first black student to enroll at the university on Oct. 1, 1962. Federal authorities deployed more than 3,000 soldiers and more than 500 law enforcement officers to Oxford during the integration. An angry mob started an uprising that killed two white men. More than 200 people were injured. Ole Miss sponsored lectures and other events this year to commemorate the 50th anniversary.
"Now, 50 years later, about 2 percent of the overall student body goes out to protest when their guy doesn't win the presidency and a portion of that small percentage displays the ugly strain that still infects too many in our student body," Meacham wrote.
In a state with a 37 percent African-American population, Ole Miss now has a black enrollment of about 16.6 percent. The current student body president, Kim Dandridge, is the fourth black person elected to the post.
Jones said the campus was back to normal Wednesday.
The university was planning an event for Wednesday evening called the "We are One Mississippi Candlelight Walk" to condemn the protest, according to Thomas J. "Sparky" Reardon, vice chancellor for student affairs.