Riots rocked the city's run-down suburb of Villeneuve on Friday night as people protested at the death of a suspected armed robber during a police chase.
At least 50 cars were burnt and police were fired on.
Interior Minister Brice Hortefeux promised to restore order when he visited the scene after the unrest.
"There is a simple and clear reality in this country: there's no future for hoodlums and delinquents because in the end the public authority always wins," he told reporters.
Nobody was injured in the riots, said police, who arrested two men aged 18 and 20 for setting fire to vehicles and three more for attempted looting of shops, France's AFP news agency reports.
Correspondents say the unrest in Villeneuve recalls the civil unrest which exploded amid immigrant communities across France in 2005 after two teenagers from a Parisian suburb died as they fled police.
Unease
Mr Hortefeux made a lightning 15-minute tour of the suburb and promised quick action by the authorities.
"When I say quick, I mean immediately, that's how we are going to re-establish public order and the authority of the state," he told reporters outside police headquarters.
He said he had asked the regional government to use all means to secure the suburb neighbourhood "for now and for as much time as necessary for calm to return".
While the suburb appeared calm on Saturday, some local residents listening to the interior minister were not totally reassured, AFP reports.
One unnamed shopkeeper told the agency the minister's visit was reassuring on one level but it could "only stir up the hatred of some people".
"The minister's visit only risks aggravating the situation," said another resident, who also asked not to be named.
According to the police union SGP-FO, violence has been on the rise in recent months in Grenoble, a city of half a million at the foot of the French Alps.
"Police are at breaking point," said regional union chief Daniel Chomette, who called for reinforcements.
Prosecutor Jean Philippe said police had acted in legitimate self-defence when they were fired on at least three times after a car chase which ended in Villeneuve.
The police fired back, hitting Karim Boudouda, 27, in the head.
A post-mortem was due to be carried out on Saturday on Mr Boudouda, who had three convictions for armed robbery.
He was shot after allegedly fleeing by car with another suspect from the scene of a hold-up at a casino near Grenoble.
More than 20,000 euros (£17,000; $26,000) was taken in the robbery.
The above is the sanitised BBC version wich neglects to mention a key fact.
Contrast the above report with the one below from the DailyMail.
France was on riot alert yesterday after hundreds of Muslim youths went on the rampage in Grenoble.
Shots were fired at police and dozens of shops and cars were set on fire in the Alpine town.
Trams and buses were also held up by gangs brandishing baseball bats and bars, and a service station was looted.
The violence followed the fatal shooting of Karim Boudouda, a 27-year-old man involved in an attempted robbery at the Uriage-les-Bains casino, near Grenoble.
Locals accused armed officers of overreacting by gunning down Boudouda, allegedly as he tried to give himself up.
A Grenoble police spokesman said: ‘There has been a very fierce reaction. As mourners gathered in a park to hear Muslim prayers for the dead man late on Friday night, trouble broke out. By Saturday morning tear gas was being used on the youths.
'At about 2.30am a handgun was used to fire shots at the police. A youth was arrested, which seemed to make matters worse. The trouble went on until morning.’
Many fear the trouble will spread to other towns, as it did in 2005 when the death of two youths in Paris led to rioting and a state of emergency being declared across France.
