Hundreds of tourists and shoppers were rushed out of the plaza after a police officer spotted a suspicious backpack.
It happened just as runners were about to pick up their packets for the Nike Women's Marathon.
For two hours, Union Square's garage and surrounding streets remained closed while police with bomb-sniffing dogs searched the area.
"It's inconvenient, but better safe than sorry," Cameron Mitchell said.
"I'd rather everybody take as much precaution as possible than just let it go as no big deal," Jennifer Luong said.
Tourists wanting to go for a ride on San Francisco's famous cable cars were also disappointed.
Occupants of businesses around Union Square were told to shelter in place. Pedestrians and motorists were advised to avoid the area.
Union Square reopened two hours later after police determined the backpack did not have any explosives.