Homer Wright was charged with unlawful use of a weapon because he was convicted in the past of weapons charges and wasn't allowed to own a gun.
Now, prosecutors are dismissing the charge, but did not say why during a court hearing Monday morning.
Wright shot a 19-year-old burglar in the leg after he says the suspect broke into his Chicago home last week.
Police arrested the 19-year-old but also arrested Wright when they found out about his previous conviction.
Wright was arrested and charged after the shooting at his Englewood home, which is also his place of business.
Wright was released on an I-bond.
"The judge seen it himself, an old man protecting his family and his home," said Homer Wright's grandson Courtney Cook. "An 81-year-old man is protecting himself and his family. Is he supposed to be the victim?"
Some Englewood community residents are upset that Wright was arrested for allegedly shooting 19-year-old Anthony Robinson.
Police say Robinson broke into Wright's home situated behind the tavern he owns.
"Where in America can you not defend yourself?" said Darryl Smith of the Englewood Political Task Force. "And because you have a felony is your life less valuable than any other person? Had he not had a gun, we would be here for another reason, because he was beaten to death."
"If they come into your house, whether you are a convicted felon or not, you are going to protect yourself and your family," said 18th Ward Committeeman William Delay.
Wright has two felony convictions on his record dating back almost 20 years.
"He has a right to defend himself," said Richard Kling, clinical professor of law at Chicago Kent College of Law. "Had he not been a convicted felon, he would have the right to shoot the person dead. His problem is not the shooting but that he possessed a gun, which he was not allowed to do because of a prior record... He certainly could have used a knife. If he had used a knife there would have been no charges."