Joseph Sincavage put up the flag this week outside his Stratford home, next to a U.S. flag, a Marine Corps flag and a Vatican flag.
Neighbors called police, but town officials say the flag is not illegal.
The Marine says he'll keep flying the Nazi flag until President Obama changes some of his policies.
Jeff Jones, who also lives on Connors Lane, said he believes the flag is racist and pure evil, and those living on the road should not be forced to look at it.
Sincavage also flew a Confederate flag in the same spot several months ago.