UC Davis Chancellor Linda Katehi described the video images as "chilling" and said she was forming a task force to investigate even as a faculty group called for her resignation because of the Friday police action.
However, a law enforcement official who watched the clip called the use of force "fairly standard police procedure."
In the video, an officer dispassionately pepper-sprays a line of several sitting protesters who flinch and cover their faces but remain passive with their arms interlocked as onlookers shriek and scream out for the officer to stop.
"The use of the pepper spray as shown on the video is chilling to us all and raises many questions about how best to handle situations like this," Chancellor Linda Katehi said in a message posted on the school's website Saturday.
The protest was held in support of the overall Occupy Wall Street movement and in solidarity with protesters at the University of California, Berkeley who were jabbed by police with batons on Nov. 9.
The UC Davis video images, which were circulated on YouTube and widely elsewhere online, prompted immediate outrage among faculty and students, with the Davis Faculty Association saying in a letter Saturday that Katehi should resign.
"The Chancellor's role is to enable open and free inquiry, not to suppress it," the faculty association said in its letter.
It called Katehi's authorization of police force a "gross failure of leadership."
At a news conference later on Saturday, Katehi said what the video shows is "sad and really very inappropriate." The events surrounding the protest have been hard on her personally, but she had no plans to resign, she said.
"I do not think that I have violated the policies of the institution. I have worked personally very hard to make this campus a safe campus for all," she said.
Katehi remained in a media room for more than two hours after the news conference, eventually walking to an SUV past a silent group of students nearly three blocks long, many of them holding up signs calling for her to step down, the Sacramento Bee said.
The statewide Council of UC Faculty Associations issued a statement Saturday saying "We are outraged that the administrations of UC campuses are using police brutality to suppress dissent, free speech and peaceful assembly."
Charles J. Kelly, a former Baltimore Police Department lieutenant who wrote the department's use of force guidelines, said pepper spray is a "compliance tool" that can be used on subjects who do not resist, and is preferable to simply lifting protesters.
"When you start picking up human bodies, you risk hurting them," Kelly said. "Bodies don't have handles on them."
After reviewing the video, Kelly said he observed at least two cases of "active resistance" from protesters. In one instance, a woman pulls her arm back from an officer. In the second instance, a protester curls into a ball. Each of those actions could have warranted more force, including baton strikes and pressure-point techniques.
"What I'm looking at is fairly standard police procedure," Kelly said.
Images of police actions have served to galvanize support during the Occupy Wall Street movement, from the clash between protesters and police in Oakland last month that left an Iraq War veteran with serious injuries to more recent skirmishes in New York City, San Diego, Denver and Portland, Ore.
The forcible Oakland protest eviction, the first of its kind on a large scale, marred the national reputation of the city's mayor and police department while rallying encampments nationwide beset with their own public safety and sanitation issues.
Police chiefs and mayors held conference calls to discuss containment strategies in the days after the Oct. 25 Oakland eviction. The use of rubber bullets and tear gas dropped off, though police departments have turned to pepper spray when trying to quell large crowds.
Some of the most notorious instances went viral online, including the use of pepper spray on an 84-year-old activist in Seattle and a group of women in New York. Seattle's mayor apologized to the activist, and the New York Police Department official shown using pepper spray on the group of women lost 10 vacation days after an internal review.
In the video of the UC Davis protest, the officer, a member of the UC Davis police force, displays a bottle before spraying its contents on the seated protesters in a sweeping motion while walking back and forth. Most of the protesters have their heads down, but several were hit directly in the face.
Some members of a crowd gathered at the scene scream and cry out. The crowd then chants, "Shame on You," as the protesters on the ground are led away. The officers retreat minutes later with helmets on and batons drawn.
Ten people were arrested.
University spokeswoman Karen Nikos said nine people hit by pepper spray were treated at the scene. Another two were taken to hospitals and later released.
Nikos declined to release the identity of the officer in the video.
At Saturday's news conference, UC Davis Police Chief Annette Spicuzza said the decision to use pepper spray was made at the scene.
"The students had encircled the officers," she said. "They needed to exit. They were looking to leave but were unable to get out."
Many Twitter and Facebook comments supported the students and criticized the response.
"Stomach churning video of police using pepper spray on seated anti-Wall Street protesters in Davis, Calif.," actress Mia Farrow wrote in a retweet of the video.
Elsewhere in California on Saturday, several hundred protesters in Oakland tore down a chain-link fence surrounding a city-owned vacant lot and began setting up a new encampment.
The Occupy Oakland protesters breached the fence and poured into the lot next to the Fox Theater on Telegraph Avenue, police said in a statement.
The protesters passed a line of police surrounding the lot without a struggle, used wire cutters to take down the fence and pulled down "no trespassing" signs the San Francisco Chronicle reported.
Police removed the main Occupy Oakland encampment five blocks away Monday at City Hall, and Oakland officials said they won't tolerate new camps.
"They obviously don't want us at the plaza downtown. We might as well make this space useful," Chris Skantz, 23, told the Chronicle.
Police spokeswoman Johnna Watson said surrounding streets had been closed and officers were protecting surrounding buildings.
Watson said there had been no arrests or citations, but the city's position remains that the protesters can't stay overnight.
Police did not give their immediate plans for the site or say how or when they planned to move on the new camp.
One nearby resident expressed unhappiness about the new site.
"I supported Occupy Oakland," Sherbeam Wright told the Chronicle. "At this point I don't know what they stand for anymore."