Exceptions to the changes, which came into force Thursday, include children under 2 years of age, and visiting students and educational trips.
The new rules were supposed to come into effect in June but the introduction was delayed because many guides had already booked group tours.
Tourists and guides who break the 25-person limit or use loudspeakers will face fines of approximately $50-$100. The rules also apply on the Venetian islands of Murano, Burano and Torcello.
The move is part of a multi-pronged effort by the local government to take back some control of the city after it saw record-breaking tourism numbers in the wake of the pandemic.
In April, Venice became the first city in the world to charge a 5 (around $5.40) entrance fee, under a pilot program that ran for 29 days and netted the city more than $2.5 million.
There were protests on the day the charge was introduced, with locals waving banners and holding up their passports in anger at the city being put behind a barrier, like a theme park or museum.
However, the city has said it will double the charge when it reinstates it, probably later this year. The city says the fee was paid 485,062 times during the pilot.
Venice is not alone in its battle against overtourism.
Anti-tourism protests have been sweeping across Europe this summer, with demonstrations taking place in the Netherlands, Greece and Spain.
Officials on the Greek island of Santorini are considering limiting the number of cruise ships that can dock off its shores.
And in early July, protesters marched through popular tourist areas in the Spanish city of Barcelona, spraying unsuspecting visitors with water pistols while chanting "tourists go home."