It was the latest in a series of coups in the Philippines since the ouster of dictator Ferdinand Marcos two decades ago.
It started when Trillanes and some other soldiers walked out of their own trial for the 2003 mutiny, escorted by guards assigned to keep them from escaping.
They marched to the Peninsula Hotel in Manila's Makati financial district and took over the building, calling for the overthrow of President Arroyo.
"We have been witness and victims of the kind of ruthlessness this administration is giving to the people. Now, like soldiers we are going to face this," Trillanes told reporters, when asked if he was ready to face fresh charges over this incident.
Journalists trying to do live phone-ins spluttered and covered their faces with handkerchiefs as the tear gas rose from the lobby to higher floors.
The rebel soldiers, who had earlier stopped people from leaving the hotel lobby as a 3 p.m. (7 a.m. British time) deadline for them to end their mutiny passed, later relented and let them go.
Arroyo, deeply unpopular due to long-running corruption allegations, has survived at least two coup plots and three impeachment bids because the jaded middle class is sick of political instability, and she has a huge majority in the lower house.
She has also been buoyed by a strong economy.
The stock market and the peso currency pared earlier gains on the soldiers' actions but the main index still finished up 1.17 percent and has risen nearly 20 percent this year.
The peso is Asia's top performing currency, up 14.80 percent since the start of 2007.
"It hurts the whole country," said Vivian Yuchengco, a director of the Philippine Stock Exchange. "People like that should be thrown in jail."
The Philippines has seen more than a dozen coup attempts since the overthrow of Marcos in 1986 and residents of Manila are used to varying degrees of unrest.
Thursday's drama attracted hundreds of curious onlookers, but no one voiced any support for those inside the hotel, and there were no reports of unrest within the military.
The government imposed a curfew from midnight to 5 a.m. in Manila and two surrounding regions on Friday, a government holiday. Officials called it a precautionary measure.
Markets were unlikely to be much affected when they reopen on Monday, barring any further unrest, economic analysts said.
