Commissioner Roger Goodell notified Adams of the fine Monday. League spokesman Greg Aiello said it is for conduct detrimental to the NFL. Adams was seen making the gesture while in his luxury suite and again on the field after Sunday's 41-17 victory.
The NFL fined former 49ers owner Eddie DeBartolo $1 million after he pleaded guilty to a felony and suspended him for the 1999 season.
Since then, the biggest fine handed down by the NFL to an individual was $500,000 to New England Patriots coach Bill Belichick for the Spygate scandal. The league also fined the New York Jets and former coach Eric Mangini $125,000 in September for violating its rules on injury reporting with Brett Favre last season.
The 86-year-old Adams apologized in a statement, saying: "I need to apologize for my actions yesterday near the end of the game. I got caught up in the excitement of a great day, but I do realize that those types of things shouldn't happen. I need to specifically apologize to the Bills, their fans, our fans and the NFL.
"I obviously have a great deal of respect for [Bills owner] Ralph Wilson and the history we have shared. I also understand there will probably be league discipline for my actions and I will accept those."
Adams and Wilson are original owners from the American Football League, and Sunday's game was a legacy game with both teams wearing throwback uniforms. Wilson was inducted into the Pro Football Hall of Fame this year, and their teams share a history of emotional playoff games, including the Music City Miracle in January 2000.
Goodell was at the game, after having breakfast with Adams. The league said that Goodell left Adams' suite at the end of the third quarter and spent the fourth quarter sitting with fans in the end zone before leaving the stadium.
Titans coach Jeff Fisher said he knew that Adams had been excited for this game because of the 50th anniversary of the AFL and because Wilson was coming in for it.
"They're close. There's been some tremendous matchups over the years between the two clubs. The playoff loss there, the Music City Miracle here ... There's a great deal of history here. I know this was a game he'd been looking forward to," Fisher said.
Titans cornerback Cortland Finnegan, whose fellow defensive backs Vincent Fuller and Roderick Hood scored the last two touchdowns with interception returns in the final three minutes, said he was all for it if Adams was enjoying himself.
"I don't know if he did it, but I condone fun things," Finnegan said, according to The Tennessean. "If he was having fun doing it, then by all means, do what you do."
Adams can be seen in a YouTube video flashing the hook 'em sign of the Texas Longhorns, whom Titans quarterback Vince Young played for, before extending each hand with the middle finger individually, then together, after pointing toward the Bills' sideline.
The Tennessean reported Adams was seen making the gesture again on the field after the game.
Buffalo defensive tackle Marcus Stroud saw footage of Adams on TV but didn't care.
"He owns that team and Mr. Wilson owns our team. That's about the gist of it, as far as it goes with me. It's not like he can come down and strap up and put on any pads or anything like that. It doesn't bother me. If that's what he wants to do, go for it," Stroud said.
Titans linebacker Stephen Tulloch said Adams' presence was an encouraging sign.
"He is a cool owner and it is good to see him around here supporting us," Tulloch said, according to the Nashville newspaper. "To have an owner like that, it's cool."
Information from The Associated Press was used in this report.