The arrests came a week after a 24-year-old man there wrote to the Vatican alleging a group of priests molested him as a boy as well as other children.
"Police this morning arrested four priests implicated in this affair," Interior Minister Jorge Fernandez Diaz told reporters.
Judicial sources last week told AFP that courts had launched an investigation targeting 12 people.
The Archdiocese of Granada said it suspended several priests and sent the conclusions of its own internal inquiry to the Vatican, acting after the young man's letter.
The Archbishop of Granada Francisco Javier Martinez and other clerics yesterday prostrated themselves on the floor during a mass in a gesture of apology to victims of abuse.
After a series of paedophilia scandals in the church over recent years, Pope Francis has taken a zero-tolerance approach since taking over last year from Benedict XVI.