The graffiti, which is on a roughly 10-story-tall water tower on the island's northern end, reads "Peace and Freedom Welcome Home of the Free Indian Land" in red, capital letters up to 5 feet high.
It had faded and was barely visible before the Park Service undertook a $1.5 million restoration of the rusting tower, the San Francisco Chronicle reported (http://bit.ly/13u5cgn ) on Monday.
The graffiti was restored six weeks ago by a Ute Indian who was among the island's occupiers.
"It is not something that people expect to see," said Marcus Koenen, site supervisor for Alcatraz. "When you see this graffiti, when you walk off the boat, it opens your eyes to the Indian story of the island."
Alcatraz, in San Francisco Bay, is best known as the site of a former U.S. penitentiary that was home to some of the country's most notorious inmates.
But a band of Native Americans who wanted to turn it into an Indian cultural center or university devoted to native studies occupied the island in 1969 after the prison closed.
"It would be fitting and symbolic that ships from all over the world entering the Golden Gate would first see Indian land and thus be reminded of the true history of this nation," a proclamation they issued in 1969 read.
Many of the original occupiers eventually left, and the government retook Alcratraz in June 1971.
The Park Service took over its management the following year, and it has since become a major tourist draw.