The video features controversial rapper Wee Meng Chee, known by his stage name Namewee, sitting on a chair in front of a domed building and mimicking barks of canines from around the world.
Several black-clad dancers wearing masks of dogs gyrate around him.
The video, to mark the start of the Year of the Dog currently being celebrated across Asia, generated accusations that it was filmed in front of a mosque in the administrative capital Putrajaya.
Today, Namewee posted a picture of himself on Facebook arriving at national police headquarters in Kuala Lumpur to give a statement, and several hours later a message on his official page on the site announced: "Namewee has been officially arrested."
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"Let's pray and hope that Namewee will be released tomorrow," it read.
He faces up to a year in jail if found guilty.
In a YouTube video posted several days ago, the rapper denied having insulted Islam and said that the domed building visible in the background was the prime minister's office, not a mosque.
Lunar New Year is a major celebration in Malaysia, where a quarter of the population are from the Chinese diaspora.