Consent has been given for the restaurant to be built on the site at Motueka, near Nelson, but a group calling itself Uniquely Motueka is standing in the way.
The group says McDonald's will add only unwanted health, trash and traffic problems to the town of about 7000.
The proposed restaurant site was dug up into a "community garden" on Sunday night with a variety of flowers and vegetables planted "to represent the diversity in the community that McDonald's never will", said Uniquely Motueka spokeswoman Tara Forde.
A 1000-signature petition against the restaurant has also been given to the local Tasman District Council.
"I don't think it's as easy as winning or losing," Ms Forde said.
"It's about showing McDonald's they are not welcome in a lot of small towns around New Zealand, and the tide is turning on their business as people become more socially aware."
Residents in the Auckland suburb of Balmoral are fighting a similar battle.
A McDonald's spokeswoman said the company was "relatively surprised" at the level of opposition in Motueka.
"But it's important to understand that generally people who oppose things will be the loudest.
"We feel that part of the community are supportive of us."
The Motueka McDonald's restaurant is due to be built by May. The Mayor of Tasman District, Richard Kempthorne, said it was "absolutely a done deal", and the matter could no longer be influenced by the council.