Some 60,000-70,000 people took part, according to the organisers, many wearing the blue of the CEU and some waving Hungarian, EU as well as US flags as they marched to the government offices in Budapest
The English-language CEU was founded by Hungarian-born billionaire George Soros in the early 1990s, aimed at helping the region's transition from communism to democracy.
The new rules, approved by parliament on Tuesday, bar institutions based outside the European Union from awarding Hungarian diplomats without an agreement between national governments.
The legislation has attracted widespread criticism abroad, including from Washington, Brussels and academics. There were also street protests last Sunday and on Tuesday.
"I have no children, but the way they adopted the regulations against this university is frightening," Gabor Kis, 45, a cook, told AFP during the protest today.
"If they can do that to CEU, they can do whatever they want! This has to stop!"
The legislation, which still has to be signed into law by the president, does not mention the CEU by name but the university sees itself as the main target and has warned it may have to close.
Last week the government published a legislation that will oblige NGOs receiving above a certain amount of foreign funding to register and stamp any publication with "foreign-funded organisation".
Mirroring similar rules in Russia, this is also seen as targeting Soros's Open Society Foundation which funds civil society groups and which has also come under fire elsewhere in the region.
Government spokesman Zoltan Kovacs denied in a blogpost on Thursday that the CEU was being singled out, saying that irregularities had been found with 27 foreign higher education institutions.
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