China's foreign ministry has said that artist Ai Weiwei cannot leave Beijing without permission, a day after he was freed from police detention.
Mr Ai - a vocal government critic - was bailed after the Chinese authorities said he had confessed to tax evasion. Mr Ai said he was unable to comment.
The 54-year-old's arrest in April sparked an international outcry.
Mr Ai was held for 80 days at a secret detention centre with no access to a lawyer or contact with his family.
Western governments had demanded Mr Ai's release and that of many other activists who have been rounded up by China's authorities in recent months, in what is the most serious crackdown on dissidents in China in many years.
Speaking on Thursday, foreign ministry spokesman Hong Lei outlined the terms of Mr Ai's bail, which are valid for 12 months.
"During this period, Ai Weiwei is still under investigation. Without permission... he is not allowed to leave his area of residence," Mr Hong told reporters.
He said "area of residence" meant "the city" (Beijing) and stressed that Mr Ai was not confined to his house.
He confirmed state media reports that Mr Ai had been released due to his "good attitude in confessing his crimes" and because of health issues. The artist has diabetes.
Mr Ai appeared briefly outside the gate of his studio in Beijing on Thursday.
He told reporters he was happy to be home and had not slept since being released by police overnight, adding he could not say any more to the media.
So China's most famous living artist and one of the most outspoken critics of the ruling Communist Party appears to have been silenced, says the BBC's Damian Grammaticas in Beijing.
China's police allege Mr Ai has admitted to tax evasion and promised to pay back the money.
His supporters say the charges were motivated by his activism.
News of his release has received a guarded welcome. A US state department spokesman said everyone held in China for "exercising their human rights" should be freed.
German Chancellor Angela Merkel said Mr Ai's release could only be a first step, and China must fully explain the accusations against him.
Amnesty International said his long detention without charge had violated China's own legal process.