Over two dozen policemen, some in civilian clothes, raided the posh Kohsar Market on Friday night and took the man into custody, officials and a witness were quoted as saying by the Dawn newspaper on Sunday.
The man put up some resistance, which led to an exchange of harsh words. He was handcuffed and taken in a vehicle to an undisclosed place.
Before the raid, police cordoned off the Sector F-6/3 area, which has several embassies and residences of diplomats.
According to witnesses, the man in his mid-30s came to the market at about 7 pm local time and sat in an open area.
He remained busy with his mobile phone, calling or sending messages, before the raid at about 10:30 pm, they said.
A police official denied that any arrest had been made from Kohsar Market but said that security in and around Sector F-6/3 was tightened on Friday night and police carried out snap checking.
Officials told the newspaper that the arrested man, who is yet to be identified, might be among some people picked up by an intelligence agency for alleged links with Faisal Shahzad, the son of a former Pakistan Air Force officer who has been held in the US in connection with the failed May 1 attack in Times Square.
Media reports have said that the ISI is conducting the investigation into Shahzad's links and contacts in Pakistan.
There has been no official word on this issue.
Seven men have either been picked up or gone missing since May 10 in Islamabad, including Suleman Ashraf, the son of the owner of 'Hanif Rajput Catering Service', and Ahmed Raza Khan.
It is believed all these men have been detained by intelligence operatives for alleged links with Shahzad.
Ashraf allegedly provided financial help to Shahzad when he was studying at the University of Houston.
35-year-old Ashraf returned to Pakistan from the US in 2001 after getting a bachelor's degree in computer science. He was last seen by his family when he left for his office at about 11 am on May 10.
Faheem Khan, a cousin of Ashraf, said he was a liberal person who regularly offered prayers and was fond of music and movies.
He said that since his return to Pakistan, Ashraf had not visited the US or any European country. Ashraf also did not travel to Khyber Pakhtoonkhwa or any tribal area.
Khan said a case was registered against unidentified persons by police after his cousin went missing.
Ashraf's wife also lodged a complaint on May 19 with the Supreme Court's Human Right Cell about his disappearance, he said.
Ashraf's father has said his son had no relations with Shahzad.
The US embassy in Pakistan has issued a warning to US government personnel and American citizens about terrorist groups forging links with the Hanif Rajput Catering Service.
However, unnamed security officials have been quoted in media reports as saying that Shahzad lived in Ashraf's house in Islamabad for some time.
Norwegian mobile operator Telenor has said one of its employees in Pakistan had been detained by authorities over the bomb plot.