The UKIP leader was barracked by left-wing and anti-racism protesters who joined a press conference held in a bar on the Royal Mile in Edinburgh.
Press, protesters and UKIP members were all thrown out of The Canons' Gait pub by worried bar staff, forcing Mr Farage to run the gauntlet of more protesters on the streets outside.
He took refuge in a passing taxi but the driver refused to take the fare after the car was mobbed by protesters.
After a stand-off lasting several minutes, Mr Farage was escorted by police back to the pub, where he was locked in for his own safety.
As the bizarre scenes unfolded, the UKIP leader was harangued with apparently un-ironic cries of: "Leave Scotland, go back to England."
He also faced shouts of "racist scumbag" and "bawbag".
Around 100 protesters, organised by Edinburgh College Students Association and the Radical Independence Campaign, a loose alliance of left-wing independence supporters, disrupted the event, which had been designed to raise UKIP's profile in Scotland.
Protest organiser James Moohan, vice-president of Edinburgh College Students Assocation and an NUS official, said UKIP's calls for greater curbs on immigration were "bad for British politics".
He added: "We want to send a clear message they are not welcome here."
UKIP spokesman Gawain Towler said: "It was inchoate rage. They seem so frightened by a different point of view they want to close it down."
He said Mr Farage had laughed off the incident. The UKIP leader was in Scotland for a private meeting with key supporters also attended by Stuart Wheeler, the betting tycoon and party donor.
Protester Max Crema, 21, an economics student and vice president of services at Edinburgh University Students Association, suggested UKIP has "a well documented history of racism".
Mr Farage replied: "If you believe that then you are less intelligent than you look, dear boy.
"We are a non-racist, non-sectarian party and unlike every other party in British politics we actually forbid people who have been on extreme left or right-wing extremes from joining our party.
"The Labour Party actually has former BNP members sitting as Labour councillors, so don't give me that rubbish."
Taxi driver Alexander McMillan said he was shaken by the incident.
"They were all going bloody mental," he said.
"I couldn't take him, they were attacking that taxi and blocking its path so I just had to give up, and then the police got involved."
As a police van was dispatched to take him away, protesters chanted "Farage is being lifted" and "How does it feel to be treated like an asylum seeker?"
UKIP, which wants Britain to leave the European Union, has no representation north of the border and polled just 0.91% of the total vote across the regions in the last Holyrood election in 2011.
Earlier this week Mr Farage, a member of the European Parliament, said: "We are growing in Scotland and have every intention of winning seats both at Holyrood and in next year's European elections north of the border. A fantasy? Not in the slightest."
The party plans to make a start by contesting the Aberdeen Donside seat at Holyrood, made vacant by the death of SNP MSP Brian Adam last month.
Ukip's candidate is Otto Inglis, a barrister who runs his own business in Edinburgh.
The party's 2010 general election manifesto pledged to replace the 129 MSPs with Scottish MPs.
The parliament would be retained but on a part-time basis with MPs spending just one week a month on ''devolved business'' in Edinburgh and the rest of the time in London.
English MPs would sit on ''English-only days'' to give people south of the border a more distinct parliament, the party argued.
Ukip also proposes downgrading Holyrood's power, arguing that all UK citizens should be entitled to equal treatment in health, education and public services.
The party picked up 147 county council seats in England and Wales earlier this month, a gain of 131.