The fighting broke out when the two sides clashed in downtown Cochabamba, also the state capital.
The protestors, who have occupied downtown Cochabamba since Monday, demanded that the Cochabamba state governor Manfred Reyes Villa's resignation for his opposition to Morales.
Local authorities confirmed that a coca farmer was shot dead as the two sides clashed with guns, sticks and rocks.
Television images showed hundreds of men running through the streets of Cochabamba as onlookers applauded from windows and police in riot gear fired tear gas.
Reyes Villa is at odds with the national government over his drive for more autonomy for his region.
In a televised message on Thursday night, Vice President Alvaro Garcia Linera linked the violence to Reyes, blaming him for failure to fulfill his duty as a governor.
"The duty of the governor is to be with his people, back there in Cochabamba, seeking peace, seeking solutions," the vice president said.
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