Most of the 26 people charged in the federal complaint appeared at the courthouse Wednesday, including Yee. A judge imposed a $500,000 bond.
At an evening news conference, Yee's attorney said, "All we can say is that we were trying to secure his release today and we accomplished that."
He went on to confirm that Yee has turned his passport over to authorities, saying that is a typical procedure.
In the early morning hours the FBI hit the Chinatown headquarters of the Chi Kung Tong, the Chinese Freemasons. They were looking for evidence linked to the arrest of notorious former gangster Raymond Chow, who is known as "Shrimp Boy."
Chow serves as the chairman of the freemasons. He was arrested at his home on Hyde Street. Chow is charged with money laundering and dealing in stolen property.
Chow was the enforcer of Chinatown's most notorious street gang in the 1980's. He spent 22 years in prison and now admits that he ran prostitution rings, smuggled drugs, and extorted thousands from business owners.
Once released, he became active in Chinatown politics. Our cameras caught up with him in May of 2012 as he worked with at-risk kids, telling them the importance of staying in school.
During an interview, Chow told ABC7 News reporter Alan Wang that he had put his criminal past behind him.
"I want to do something for the kids," Chow said. "I want to do something for the community. I want to do something for myself. I just don't want to sit at home, be useless. I know I can do something with my life."
In that same report, however, we learned from police sources that Chow was still being followed by authorities who weren't convinced that he had changed his ways.
The big arrest on Wednesday wasn't Chow, it was Yee.
"I can also confirm that State Senator Leland Yee is also a part of the ongoing investigation that's taking place at this time," said Greg Wuthrich with the FBI.
Yee, who represents half of San Francisco and most of San Mateo County, was arrested at his home in the Sunset District Wednesday morning while agents searched his house for evidence. He was driven to the federal building where he was booked on public corruption charges.
Yee is charged with six counts of depriving the public of honest services and one count of conspiracy to traffic in guns without a license.
Court documents say Yee or one of his campaign staffers accepted at least $42,800 in cash or campaign contributions from undercover FBI agents in exchange for carrying out agents' requests. He is also accused of trying to help an undercover agent obtain weapons from a Muslim rebel group.
Yee looked downcast as he appeared in court Wednesday. He told the judge he understands the charges against him.
In the meantime, the FBI in Sacramento secured Yee's office in the state Capitol while a CHP officer stood guard at the entrance. Yee is also a candidate for secretary of state, one of California's highest offices.
The predawn multi-agency raids involved the FBI, other federal agencies, and local police.
Hundreds of agents and police hit homes and buildings mostly in San Francisco. The raids included a building in the Bayview, where federal agents and police carted off boxes of evidence.
One of the targets was a home on 42nd Avenue in San Mateo. Federal agents seized marijuana plants and other evidence from the house. One source says that it was the site of an indoor pot grow.
Those arrested appeared in federal court Wednesday to be arraigned.
One of those arrested is Keith Jackson, a well-known political consultant and former school board member. His most serious charge is murder for hire.
The complaint accuses Jackson of conspiring with Chow to import and sell weapons. It also says Jackson, a close friend of Yee's, brought the senator into the deals and that they bribed people into giving political donations. All this was caught by an undercover FBI agent.
According to the FBI affidavit, Yee told an undercover FBI agent about an arms dealer he'd known for years. It says, "According to Senator Yee, the arms dealer is 'low key' and has been trafficking weapons for quite a while... the arms dealer sourced weapons from Russia."
The undercover agent told Yee and Jackson the first arms deal would pay $100,000.
Yee's attorney, Paul De Meester, says Lee is innocent of the charges. He told the media, "We'll always, as in every case, enter not guilty pleas and then the case takes on a life of its own, with discovery being provided, motions being made, sometimes a case winding up in trial."
San Francisco City Hall is reeling from news of State Sen. Leland Yee's arrest. He was a two-term supervisor there.
Mayor Ed Lee says he is in shock over the federal charges against Yee.
"You know, what flashes through my mind is decades of public service," he said. "And I hate seeing that situation occur."
Leland Yee got his political start on the San Francisco School Board back in 1988. He served with Tom Ammiano, now a member of the state Assembly.
"He was very caring about minority students and the services they got," he said. "And he was a member who went to schools and visited schools and people were always impressed with that."
Yee's eight years on the school board gave him the push to run for city supervisor. He served from 1997 to 2002 and was known to take on then Mayor Willie Brown.
Former San Francisco Supervisor Jake McGoldrick was a colleague. He says he's saddened by Wednesday's events.
"He's spent the last 40 or 50 years of his life doing things to help people in this world," he said. "And, I think it's sad."
Yee's rise to power did not come without controversy. In 1992 he was arrested in Hawaii on suspicion of stealing a bottle of suntan oil. And twice in 1999 he was pulled over by San Francisco police on suspicion of cruising for prostitutes. He said it was mistaken identity. Still, when he ran for mayor in 2011, Yee seemed to be the candidate to beat until Ed Lee entered the picture.
On Wednesday, Lee said he holds no grudges for that campaign and carefully answered questions about Yee's character.
"I don't personally hang out with Leland so I don't know everything about his life," Mayor Lee said. "But I give him the benefit of the doubt that because he is a public officer for the state that he's held to the same standards we are."
The reaction to the arrest and indictment of State Sen. Leland Yee was swift by Wednesday afternoon. No fewer than a dozen of Yee's colleagues told reporters they want him to resign immediately.
"We express our anger and our revulsion at today's events," said Senate President Pro Tem Darrell Steinberg of Sacramento.
Steinberg minced no words in describing the reaction he and colleagues share about the arrest of Yee.
"These allegations are serious," he said. "They involve gun running and things that frankly are surreal. The indictment itself is shocking."
Steinberg says he and the others are unified in their call for Yee's immediate resignation.
"Leave," he said. "Absent that, we are prepared to go to the floor immediately and suspend him."
"It's discouraging," added State Senator Mark Desaulnier, D-Walnut Creek.
Earlier, Desaulnier said he would reserve judgment about Yee. But he was more concerned about the image of the state legislature as a whole.
"That's the most important thing this country to afford, is the relationship between the elected and the voters," he said. "And when that starts to erode, democracy takes a hit and that's not good."
Yee is the third democratic senator to face criminal allegations. Their colleagues in Sacramento don't plan to welcome them back anytime soon.
"They will never set foot on the senate floor again unless or until they are acquitted," said State Senator Marc Block, D-San Diego.
As lawmakers were reacting to Yee's arrest, the FBI was removing boxes of potential evidence from the senator's office.
(The Associated Press contributed to this report)