Lim Tean’s arrest comes days before he was set to defend a client in a defamation case against the city-state's Prime Minister, Lee Hsien Loong.
Singapore police said that the lawyer also had not complied with earlier notices to attend police interviews.
In Singapore, the now-arrested lawyer leads a small opposition party that unsuccessfully contested an election this year.
"The police had no choice but to arrest Mr Lim Tean in order to conduct the investigations," police said in a statement, adding that they rejected allegations by Lim that the arrest was politically motivated.
The Prime Minister's press secretary referred Reuters to the police statement and did not have further comment on Lim Tean's arrest.
In a trial likely to be watched closely next week, Prime Minister Lee Hsien Loong is suing financial adviser Leong Sze Hian over a Facebook post in which he shared a story linking Lee to Malaysia's 1MBD state fund money-laundering scandal.
Lee's lawyers at the time said the allegation was "false and baseless" and Leong subsequently deleted the post.