Maldivian police arrested Nasheed, 45, at the Island of Faresmaathodaa of Gaafu Dhaalu Atoll, south of Maldives.
Police spokesman Hassan Haneef confirmed that the former president has been arrested after Hulhumale Magistrate Court ordered the police to produce him before it.
He was arrested from the residence of former housing minister Mohamed Aslam who is a native of that island.
The court ordered Nasheed's arrest after he questioned legitimacy of a special court to try him on charges of abuse of power while he was in office.
He is facing charges of power abuse over the arrest and subsequent detention of Chief Criminal Judge Abdulla Mohamed during his last days in office.
Nasheed, the first democratically elected president of the Indian Ocean archipelago, was forced out in February in a police mutiny after he detained the judge. Last week he refused to appear before a three-judge bench set up to hear charges that he abused his power while in office.
"Questioning the legitimacy of the ad hoc Magistrate Court, I have appealed the case with the high court and I await a decision," he wrote on his Twitter handle.
Nasheed, who won the first democratic elections in the country in 2008, said he would not be given a fair trial. The case could see him jailed or banished to a remote island and barred from future elections.
The case relates to his decision to send the military to arrest of a senior judge in January, an action that led to protests and his resignation in February.
Besides Nasheed, former Defence Minister Tholhath Ibrahim Kaleyfaanu, former Chief of Defence Force Major General Moosa Ali Jaleel, former Brigadier General Ibrahim Mohamed Didi and Colonel Mohamed Ziyad are also being charged with the unconstitutional arrest of Judge Mohamed.
If found guilty Nasheed faces a maximum sentence of three years in jail or exile or a fine not exceeding MVR 2,000. If Nasheed is convicted and sentenced to a period of more than one year, he would be disqualified from contesting in the upcoming Presidential election.
Meanwhile, Nasheed's Maldivian Democratic Party today interrupted the session of Parliament to protest against his arrest.