Mountbatten-Windsor, who turned 66 on Thursday, was questioned throughout the day by detectives from Thames Valley Police. Earlier this month, the force confirmed it was investigating claims that he shared sensitive documents with the late convicted sex offender while serving as a trade envoy.
The arrest of the senior royal, eighth in line to the throne, marks an extraordinary moment for the modern monarchy, Reuters reported.
King Charles III expressed his "deepest concern" over the news and said the royal family was offering its "full and wholehearted support and co-operation."
Mountbatten-Windsor has always denied any wrongdoing in connection with his affiliation with Epstein. His arrest caps years of growing pressure on Andrew, the brother of King Charles and second son of the late Queen Elizabeth II.