Fighting broke out Saturday when 500 officers arrived in Xiaoshan, a district on the outskirts of the resort city of Hangzhou, the Information Center for Human Rights and Democracy reported.
The demolition work went ahead despite the clash, in which about 20 people in all were hurt, the Hong Kong-based group said.
A Xiaoshan police officer confirmed an "illegal building" had been torn down, but refused to give his name or any details. Other local government officials refused to comment.
The official Hangzhou Daily newspaper reported an "illegal building" had been demolished Saturday, but did not mention a clash or injuries. The paper said a "small number of conniving people" had backed the church's construction in defiance of Chinese laws on land use and management.
The Information Center said the demolition followed orders issued in June by the provincial government and religious affairs bureau to crackdown on "illegal religious buildings," a reference to China's tight restrictions over all forms of worship.
China permits Christians to hold services only in the Communist Party-controlled official church, and unauthorized gatherings are routinely broken up and their leaders often arrested.
The clash appears to have been one of the largest-scale confrontations in recent years between police and Christian worshippers.