Rob Macaire made the statement on Twitter after the Iranian authorities detained him on suspicion of organising, provoking and directing radical actions.
It came as riot police fired tear gas at thousands of Iranians who had taken to the streets late on Saturday in the capital and other cities.
They were chanting "Death to the dictator", directing their anger at Iran's Supreme Leader Ali Khamenei, hours after the country's Revolutionary Guard had admitted shooting down a Ukrainian passenger plane near Tehran.
The Iranian authorities had initially denied being responsible for bringing down Ukrainian International Airlines flight PS752 on Wednesday but backtracked in the face of growing evidence to the contrary.
Mr Macaire tweeted in Farsi and in English: "Thanks for the many goodwill messages. Can confirm I wasn't taking part in any demonstrations! Went to an event advertised as a vigil for victims of #PS752 tragedy.
"Normal to want to pay respects- some of victims were British. I left after 5 mins, when some started chanting.
"Detained half an hour after leaving the area. Arresting diplomats is of course illegal, in all countries. See comments by Foreign Secretary @DominicRaab"
The largest share of the 176 people aboard the flight who died were Iranians, many with dual citizenship, 57 were Canadian and four were British.
On Saturday evening, Mr Raab had issued a statement which said: "The arrest of our Ambassador in Tehran without grounds or explanation is a flagrant violation of international law.
"The Iranian government is at a cross-roads moment. It can continue its march towards pariah status with all the political and economic isolation that entails, or take steps to deescalate tensions and engage in a diplomatic path forwards."
Criticism of the authorities in Iran is not unheard of, but it tends to stay within narrow limits.
The protests come weeks after Iran faced the country's bloodiest unrest since the 1979 Islamic revolution, with dozens said to have been killed.
Saturday's demonstrations were not limited to Tehran, with major cities such as Shiraz, Isfahan, Hamedan and Orumiyeh seeing similar action on the streets.
US president Donald Trump posted a response on Twitter in both English and Farsi saying: "We are following your protests closely, and are inspired by your courage. There can not be another massacre of peaceful protesters, nor an internet shutdown. The world is watching."
France has said its investigators will be investigating the plane's black boxes during an investigation into why the plane came down, aided by others from Canada, US, Iran and Ukraine.
