The Bengals cut him after his fifth arrest since 2005.
An attorney for Henry, 24, entered not guilty pleas for him after Henry was accused of punching an 18-year-old man in the face and breaking his car window with a beer bottle.
Municipal Court Judge Bernie Bouchard set bond at $51,000 on charges of misdemeanor assault and criminal damaging. Noting Henry's previous arrests involving drugs, guns and alcohol, the judge called Henry "a one-man crime wave." He ordered electronic monitoring if Henry makes bail.
NFL spokesman Greg Aiello said it was premature to speculate on Henry's future in the league.
"It will be reviewed under the standard conduct policy," Aiello said.
Henry did not speak at the hearing. His lawyer, Perry Ancona, disputed the allegations in the complaint sworn by Gregory Meyer.
"We have a different set of facts we ask the court to consider," Ancona said.
Minutes before the arraignment, Ancona broke the news to Henry that he had been released.
Bengals president Mike Brown said in a statement that Henry, an often brilliant receiver who would be in his fourth pro season this year, had forfeited his career with the club.
"His conduct can no longer be tolerated," Brown said.
Henry was suspended by NFL commissioner Roger Goodell for the first half of last season for repeatedly violating the league's conduct policy. He also was suspended for two games in 2006.
"The Bengals tried for an extended period of time to support Chris and his potentially bright career," Brown said. "We had hoped to guide him toward an appropriate standard of personal responsibility that this community would support and that would allow him to play in the NFL. But those efforts end today, as we move on with what is best for our team."
Henry's agent, Marvin Frazier, thanked the Bengals for their patience.
"I just want to say that we're sorry this all happened, and we will continue to try to work to help Chris," Frazier said. "I do want to thank the Cincinnati Bengals -- Mike Brown, [coach] Marvin Lewis and everyone -- for all they have done to try to help this young man. Many of them have gone beyond the call of duty."
Under the NFL's tough new policy, Henry could face further suspensions even if he is not convicted of the latest charges. The Bengals were among the worst offenders in recent years, with 10 players arrested in a 14-month span from April 2006 and June 2007.
According to a complaint filed with authorities, Henry was identified by Meyer and a witness who claimed Henry punched Meyer on Monday, causing "visible injury." Henry then threw a beer bottle at Meyer's car, breaking the rear passenger window, according to the affidavit.
After an arrest warrant was issued, Henry surrendered to police Wednesday night.
Henry has had a string of problems with police. He was in court last week after being ticketed for driving with expired Kentucky license plates. He paid $149 in fines and court costs, according to the Municipal Court records.
He was ticketed a year ago for driving with a suspended license.
Henry was arrested four times between December 2005 and June 2006. He was accused of possession of marijuana in northern Kentucky, carrying a concealed weapon in Florida, drunken driving in Ohio and providing alcohol to minors in northern Kentucky. He pleaded guilty to the marijuana possession and concealed weapon charges. In the drunken driving case, he pleaded guilty to a lesser charge of reckless vehicle operation. In the last case, he served two days in jail in 2006 after pleading guilty to a charge of letting minors drink alcohol in a hotel room he had rented.
Following his suspension, Henry caught 21 passes for 343 yards and two touchdowns last season. He had nine touchdown catches in 13 games in 2006, when he was suspended by the league for two games and benched for another by Lewis because of misconduct.
The 6-foot-4, 200-pound receiver was a third-round draft pick from West Virginia in 2005.
Disgruntled star receiver Chad Johnson was stunned when told of Henry's release.
"Are you sure? Man, they can't let him go. That dude is good. He's very, very good," Johnson said on 1050 ESPN New York.
"We need him. Those are not easy shoes to fill, regardless of the trouble he has gotten into in the past," Johnson said.
Information from The Associated Press was used in this report.