Yevgeny Prigozhin, the leader of the Russian Wagner mercenary group, claims to have taken control of "all military facilities" in Rostov-on-Don, a city in the country's south.
Hours after he threatened to oust Sergei Shoigu, minister of defense, the announcement was made.
Vladimir Putin, the president, referred to this as "a stab in the back" and promised to hold those who "betrayed" Russia accountable.
He acknowledged that things in Rostov were still challenging. In Moscow, security has been stepped up.
Alongside the Russian army's regular counterpart in Ukraine, there has been a private mercenary force known as The Wagner Group.
As Mr. Prigozhin has vocally criticized Russia's military leadership in recent months, tension between them over how the war has been fought has risen.
The dramatic situation worsened after Mr. Prigozhin claimed that his group's base in Ukraine had been attacked by Russian forces, a claim Moscow refuted.
According to Steve Rosenberg in Moscow, the BBC's Russia editor, although Mr. Prigozhin claims this is not a military coup, his goal appears to be toppling Russia's military leadership.
In a video he shared on his Telegram channel on Saturday, Mr. Prigozhin claimed that his fighters had entered Rostov-on-Don after crossing the border from Ukraine, and he vowed that anyone standing in their way would be wiped out.
No specific location was given, and it was impossible to immediately confirm his claim that his forces had shot down a Russian military helicopter that had "opened fire on a civilian convoy.".
The local governor in Rostov advised residents to maintain calm and stay inside.
Additionally, it is rumored that Wagner forces are in charge of the military installations in Voronezh, a city located between Rostov and Moscow.
Mr. Putin called the action in his Saturday TV address a "betrayal" by those who put their own interests ahead of Russia's best interests.
The stern-looking Russian president declared that those accountable would be held accountable without specifically mentioning Mr. Prigozhin. He encouraged the Wagner mercenaries to defy their superiors while praising them for their participation in the Ukrainian conflict.
President Putin and Mr. Prigozhin used to be close friends.
Our Moscow correspondent reports that Mr. Putin has decided to say "enough is enough" in response to the latest challenge, which is giving him headaches on top of the fact that the Russian invasion of Ukraine has not gone as planned.
