The 39-year-old Australian was held when he attended a central London police station by appointment at 9.30am.
He will appear before a district judge at City of Westminster Magistrates’ Court later today, where his lawyers are expected to fight extradition proceedings.
A Metropolitan Police spokesman said: "Officers from the Metropolitan Police Extradition Unit have this morning arrested Julian Assange on behalf of the Swedish authorities on suspicion of rape.
"Julian Assange, 39, was arrested on a European Arrest Warrant by appointment at a London police station at 9.30am.
"He is accused by the Swedish authorities of one count of unlawful coercion, two counts of sexual molestation and one count of rape, all alleged to have been committed in August 2010.
"Assange is due to appear at City of Westminster Magistrates’ Court today."
Mr Assange has not been seen publicly for 31 days, since an appearance in Geneva, and was believed to have been in hiding in the south-east of England as the latest tranche of wikileaks material was released.
A European Arrest Warrant was issued by the Swedish last month but could not be acted upon because it did not contain sufficient information for the British authorities. A spokesman for Marianne Ny, the Swedish prosecutor, said the extra details were sent last week.
Police processed the warrant yesterday and arrangements were made with Mark Stephens, Mr Assange’s British lawyer, for the Wikileaks founder to attend a central London police station.
Mr Stephens said his client was keen to discover what allegations he was facing so he could clear his name.
"It’s about time we got to the end of the day and we got some truth, justice and rule of law," he said.
"Julian Assange has been the one in hot pursuit to vindicate himself to clear his good name.
"He has been trying to meet with her (the Swedish prosecutor) to find out what the allegations are he has to face and also the evidence against him, which he still hasn’t seen."
The 39-year-old Australian has been under intense pressure since the release of thousands of secret documents in recent weeks.
Kristinn Hrafnsson, spokesman for WikiLeaks, said Mr Assange had been forced to keep a low profile after several threats on his life.
Sweden’s Supreme Court upheld a court order to detain Mr Assange for questioning on suspicion of “rape, sexual molestation and unlawful coercion” after he appealed against two lower court rulings. He denies the allegations.
His details were also added to Interpol’s most wanted website, alerting police forces around the world.
Mr Stephens said he would fight any bid to extradite his client. He added that Mr Assange “has been trying to meet with the Swedish prosecutor since August this year”.
Mr Assange’s troubles deepened when his Swiss bank account was shut down after it was found he had given a false address. Postfinance, the financial arm of Swiss Post, said: “The Australian citizen provided false information regarding his place of residence during the account opening process.”
Mr Assange had allegedly told Postfinance he lived in Geneva but could offer no proof that he was a Swiss resident.
News of his potential arrest came as WikiLeaks was criticised for publishing details of hundreds of sites around the world that could be targeted in terrorist attacks.
Among the British sites listed are a transatlantic undersea cable landing in Cornwall; naval and motoring engineering firm MacTaggart Scott, based in the small Scottish town of Loanhead; and BAE Systems sites, including one in Preston, Lancashire.
The revelations prompted Sir Peter Ricketts, David Cameron’s national security adviser, to order a review of computer security across all government departments.