He was detained at a residential flat in Nasr City section of the capital, where supporters of ousted president Mohammed Morsi had held a six-week sit-in protest that was cleared by security force last Wednesday, according to reports.
The arrest comes in the wake of authorities pursing a crackdown on the Brotherhood, Morsi's party, which has triggered violent protests and attracted international condemnation.
Badie's arrest also follows just a day after 25 policemen were killed when militants ambushed them in the border city of Rafah.
Photos circulated on social media showed Badie, dressed in a traditional white robe, sitting between two policemen wearing bulletproof vests in what looked like a police van, Ahram Online said.
Egyptian satellite channel ONTV later broadcast live footage showing the 70-year-old sitting on a couch in an unidentified location after being captured.
A policeman holding a rifle was seen standing next to him. Over 850 people are reported to have been killed so far following a tense standoff between the army-backed government and pro-Morsi supporters after the former President was ousted in coup earlier by the army.
The supporters of Muslim Brotherhood have been staging demonstrations across the nation demanding reinstatement of Morsi - the country's first freely elected president - since his removal on July 3 by the army.
His arrest comes days after his son Ammar Badie, 38, was shot dead during protests in the capital's Ramses Square, BBC reported.
His detention is likely to ratchet up tensions in the deeply divided Arab nation, where an indefinite dusk till dawn curfew is in place.