Authorities said more than 120 people had been moved, by order of a court. Activists said many of those forced out were children and new-born babies.
The local mayor admitted the crackdown was "completely catastrophic" for the families involved.
The government has pledged new efforts to integrate Roma.
There are an estimated 15,000 ethnic Roma living in illegal camps across France.
As police moved into the Saint-Priest camp near Lyon on Tuesday, Roma families walked off the site without any provision being made to rehouse them.
Women carried babes-in-arms, men hefted pushchairs loaded with belongings, and a crane was deployed to pick up empty caravans.
Martine David, the local mayor, admitted the Roma might just set up a new camp nearby.
"We are going round in circles," she said. "We can't offer them a permanent housing solution and I know there's a risk they will just set up another camp.
"On a human level, it is completely catastrophic but we just don't have the means to deal with this kind of situation."
Activists said the local authorities were planning to put buildings up on the vacated land.
On Monday, around 70 people, including 19 children, were expelled from a Roma camp in a suburb of Paris, the AFP news agency reported.
In 2010, the government of conservative ex-President Nicolas Sarkozy in 2010 embarked on a major clearance programme, which sparked a row between France and Romania and was condemned by the European Commission.
The new Socialist government of President Francois Hollande has defended the policy of knocking down squalid camps, and giving Roma financial incentives to return to their home countries.
But last week it also promised to ease their plight, proposing to widen job opportunities by easing restrictions on immigrants from Romania and Bulgaria, and cancel a tax levied on employers who hire them.
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