Hafiz Mohammad Saeed was detained by authorities on Thursday in the city of Lahore, a spokesman for the charity Jamaat-ud-Dawa, run by Saeed, said.
Saeed left Lashkar-e-Taiba, the group suspected of involvement in the Mumbai Indian rail bombs that killed 180, almost five years ago to head the charity.
"They informed us last night that Hafiz could not leave his residence and this restriction is for one month," Yahya Mujahid, Jamaat-ud-Dawa's spokesman, told Reuters.
He said police had been stationed at Saeed's residence and police had also cancelled permission for Jamaat-ud-Dawa to hold a rally in Lahore on August 12.
The Pakistani interior minister, Aftab Ahmed Khan Sherpao, said authorities had detained Saeed because they feared his activities could create a law and order "situation".
"He was put under house arrest under the Maintainance of Public Order," Sherpao said, referring to a law under which authorities can detain a person up to 90 days.
Many believe Jamaat-ud-Dawa and Lashkar-e-Taiba are closely linked and both are considered terrorist organisations by the US.
Saeed has been put under house arrest and subsequently released several times before.
His detentions were part of a government clampdown on militant leaders after Pakistan joined the US-led global war on against terrorism following the World Trade Centre attacks of 2001.
Analysts say that Pakistan is often reluctant to act more strongly against such groups because of the military Inter-Services Intelligence agency's history of support for their activities.
India has called for Pakistan to act more forcefully to shut down militant groups in the wake of the Mumbai blasts.
Lashkar-e-Taiba was one of the groups implicated in December 2001 attack on the Indian parliament, which brought the two countries to the brink of their fourth war.
Jamaat-ud-Dawa was added to a US State Department terrorist list earlier this year. Pakistan has monitored the charity but not banned it.
The organisation has been prominent in providing relief after an earthquake killed over 73,000 people and left around three million destitute in Kashmir and northwest Pakistan in October.