The 47-year-old Hüseyin A. was picked up in Detmold on Monday by local law enforcement officers.
The man, who has used the alias Hüseyin Colak is thought to have been the leader of the PKK in Germany up until June, and is accused of participating in illegal activities while heading the organization, a statement from the federal prosecutor's office (BKA) said.
He had also been accused of having threatened 21-year-old woman in August 2007 with death if she did not have an abortion after she had an affair with another PKK leader in Stuttgart.
The PKK, listed as a terrorist organization by the European Union and the United States, has been fighting for self-rule in Turkey's Kurdish-majority east and southeast since 1984. The conflict has claimed more than 37,000 lives.
The arrest comes after three German climbers kidnapped by PKK members in Turkey were released on Monday.