Giriraj Kishore, the chief of the Viswa Hindu Parishad (VHP) organisation, was arrested along with two of his senior colleagues and about 500 sympathisers as he headed for Ayodhya, the city that is at the centre of a raging dispute between Hindus and Muslims.
The VHP leader had planned to defy police bans and lead tens of thousands of supporters on Friday to Ayodhya, demanding that a temple should be built on the site where the 16th century Babri mosque once stood.
A Hindu mob had pulled down the mosque in 1992, claiming it had been built after destroying a temple.
The mosque's destruction led to countrywide riots, resulting in the death of more than 2000 people.
The dispute is being heard by India's highest court, which months ago ordered the Archaeological Survey of India to excavate the site and ascertain the historical truth.
But the religious tangle is far from being resolved.
Archaeologists have reported finding ruins of a temple under the rubble of the mosque, prompting Muslim leaders to cry foul.
They allege the report has been doctored at the behest of the Bharatiya Janata Party, the leading party in India's ruling coalition.