More than 650 people wore black as they chanted outside the cathedral in Osorno calling for Bishop Juan Barros to resign.
He's accused of using his position to stop an investigation into allegations of sexual abuse against young boys by his mentor, Fernando Karadima.
Fr Karadima was found guilty by the Vatican in February 2011 of sexually abusing children but a criminal case against him was dismissed because of the historic nature of the allegations.
Bishop Barros denies knowing about what had went on.
In a letter to priests he said: "I never had knowledge of, or could have imagined, the serious abuses that this priest committed against the victims."
The protests are the latest in a string of attempts to force the bishop to step down.
More than 1,000 people have written to Pope Francis urging the pontiff to sack him.
Christian Democrat congressman Sergio Ojeda said: "I believe the Catholic Church is not listening to its people."
In an interview with La Tercera newspaper he added: "That is why we are asking for Bishop Barros to show dignity and resign, putting an end to this tremendous problem."
Three people were arrested during the protest outside the ordination.