Ray Tensing, a white University of Cincinnati police officer, was indicted on a murder charge for the death of Samuel DuBose.
Mr Tensing pulled DuBose over for not having a front licence plate and after failing to produce his licence.  The driver seemed to attempt to pull away.
The police officer fired his gun, hitting DuBose in the head.
His bond was set at $1m (Â£640,000) and he will next appear in court on 19 August. He was released on bail on Thursday evening.
The officer claims he was being dragged by DuBose's car and feared for his life, but prosecutors said the body camera footage contradicts that story.
Also Thursday, two other campus police officers who responded to the shooting have been put on paid leave, the university said.
Hamilton County prosecutor Joe Deters has said officers who corroborated Mr Tensing's account of being dragged could face charges.
Twenty-five year old Mr Tensing pleaded not guilty on both charges of murder and involuntary manslaughter.
The courtroom cheered and clapped when judge Megan Shanahan set the bond. She immediately called for order.
Ms Shanahan rejected Mr Tensing's defence, arguing that he was not a flight risk.
Mr Deters said on Wednesday that Mr Tensing "purposely killed him", calling his actions "asinine" and "senseless".
Mr Tensing's defence lawyer said he was "shocked" his client was charged with murder and that he did not mean to kill DuBose.
DuBose was 43. His family members said he would not have fought a police officer.
They are urging the community to stay calm and protest peacefully.
"Sam was peaceful," the victim's brother Audrey DuBose said. "He lived peaceful. And in his death, we want to remain peaceful."
A police officer who killed an unarmed black man during a traffic stop has pleaded not guilty to murder.