An emergency announcement from the military told people in the Vilnius region to "immediately head to a shelter or a safe place".
The alert, which lasted for about an hour on Wednesday, also led to the closure of the airspace over Vilnius Airport.
President Gitanas Nauseda and Prime Minister Inga Ruginiene were taken to shelters, and there was also an evacuation order at Lithuania's parliament, the BNS news agency reported.
It was the first major alert that sent residents and political leaders in a European Union and NATO capital rushing to shelters since Russia's full-scale invasion of Ukraine in February 2022.
"Based on the parameters we saw, it's most likely either a combat drone or a drone designed to deceive systems and lure targets," Vilmantas Vitkauskas, head of Lithuania's National Crisis Management Center, said in a news briefing.
"The electronic countermeasures here can't tell us whether an explosive device detonated or not. It's very, very difficult."
Lithuania borders Russia-allied Belarus to the east and Russia's Kaliningrad exclave to the west.
Wednesday's alert came after the military said it detected drone activity in Belarus, but no drones were sighted over Lithuania.
Belarus reported the potential drone to Lithuania, according to Brigadier General Nerijus Stankevicius, commander of the Lithuanian Army's Land Forces.
Officials "received a report from the Belarusian armed forces regarding drones potentially moving towards Lithuanian territory. Our neighbours in Latvia received similar information," Stankevicius told reporters.
On Wednesday, NATO Secretary-General Mark Rutte commended the alliance's reaction to several drone incidents in recent days, saying they had been met with "a calm, decisive and proportionate response".
"This is exactly what we planned and prepared for," he said, blaming Russia's war on Ukraine for the problem.
In recent months, Ukrainian drones aimed at Russia have crossed or come down in NATO territory on numerous occasions.
Western officials have blamed what they say is likely Russian electronic jamming of the drones.
Russia, meanwhile, has renewed threats that it will retaliate if Ukrainian drones are launched from Baltic countries or if those countries are complicit in their use against Russia.
