The alarm was raised just after 11am today, as a heavy police presence closed off Templehall Avenue.
The bomb squad were called in to a property in the area to examine the discovery.
However, the grenade was found to be inert, and the street was reopened just before 2pm.
A police Scotland spokesperson said: "Police were made aware of the discovery of what appeared to be a grenade at a property at in Templehall Avenue in Kirkcaldy at 11.05am on Monday, 26 October 2020.
"The immediate area was cordoned off. EOD officers attended and the device was found to be inert."