A Georgian TV station broadcast news that Russian tanks had invaded the capital and the country’s president was dead, which sparked panic in the country.
The Imedi network report was false but brought back memories of the 2008 war between Russia and Georgia.
Mobile phone networks were overwhelmed with calls and many people rushed onto the streets.
Imedi said the aim had been to show how events might unfold if the president were killed. It later apologised.
The head of the holding company which owns Imedi TV, George Arveladze, said he was sorry for the distress that the TV report had caused.
On Saturday evening many Georgians thought for a brief moment that history was repeating itself, because only 18 months ago Rusian tanks came within 45km (28 miles) of Tbilisi, the Georgian capital.
In its news report, pro-government Imedi TV showed archive footage of the war and imagined how opposition figures might seize power after an assassination of the country’s President, Mikheil Saakashvili.
Although the broadcast was introduced as a simulation of possible events, the warning was lost on many Georgians, the BBC’s Tom Esslemont in Tbilisi says.
In the ensuing minutes, emergency services have received an unusually high volume of calls, reported a local news agency.
And once calm returned, the report was seen by some as a poorly disguised swipe at the Georgian opposition politicians who recently travelled to Moscow in order to meet Russian Prime Minister Vladimir Putin.
Mr Arveladze told Reuters that the aim was to show “the real threat” of how events might unfold.
However it did not stop dozens of journalists and angry Georgians who gathered outside the Imedi TV studios to protest.
The report was labelled as “disgusting” by an opposition politician who was there.