Two arrests were reported. University officials say there were no injuries or property damage.
A university spokesman says the gathering began after midnight with 30 to 40 students protesting Obama's re-election but quickly grew.
Rumours exploded on Twitter after student journalists posted a video calling the gathering a riot.
Chancellor Dan Jones condemned the disturbance, saying most students and faculty are "ashamed" of the actions of a few.
The incident comes a little more than 50 years after violent riots over the enrolment of James Meredith, the university's first black student.
Jackson: A protest at the University of Mississippi against the re-election of US President Barack Obama grew into a crowd of about 400 students with shouted racial slurs as rumours of a riot spread on social media.
First Published: Thursday, November 08, 2012, 12:44