Kejriwal filed his papers at the district magistrate's office after a roadshow through parts of the Hindu holy city that drew thousands during which he attacked both Modi and Congress leader Rahul Gandhi.
The other leading candidate in Varanasi is Ajay Rai of the Congress.
Kejriwal attacked both Narendra Modi and Rahul Gandhi in his speech during the road show and said that they indulge in 'helicopter democracy.' He said that inspite of the people voting for the Congress, there was no development in the city.
Meanwhile, there has been no statement or reaction from Arvind Kejriwal over Shazia Ilmi's controversy, where she said that Muslims must be communal.
Despite of repeated attempts, he refused to answer reporters on the controversy, while AAP leader Manish Sisodia condemned Ilmi's statement.