The 72-year-old owner of the Apple Daily newspaper is accused of joining a rally on August 31 that had been banned by police for security reasons.
Lai was arrested and charged along with veteran pro-democracy activists Lee Cheuk Yan and Yeung Sum, police said.
The trio could be jailed for up to five years if convicted of taking part in an 'unauthorised assembly'. They are due to appear in court on May 5.
Tens of thousands of protesters defied the police ban on the demonstration marking the anniversary of Beijing's rejection of a call for universal suffrage for Hong Kong that sparked the 2014 'Umbrella Movement'.
Some gathered in the name of a religious procession - which does not require police approval - while others claimed they were shopping.
In a separate charge, Lai is accused of intimidating a reporter in 2018 during a vigil for the victims of China's bloody Tiananmen crackdown on June 4, 1989.
Amnesty International said the legal action against the trio was politically motivated.
'These unjustifiable arrests are a shameless attempt to harass and silence those in Hong Kong's pro-democracy movement,' said the rights group's Man-kei Tam.
Lord Chris Patten, the last British governor of Hong Kong, called the arrests of the three 'outragous'.