The 44-year-old was detained on Friday afternoon for “forceful entry and threats” on his neighbour in the holiday archipelago's capital Palma de Majorca, a police spokeswoman told AFP.
Spanish media reported the neighbour was German actor and film director Til Schweiger, but the police spokeswoman was unable to confirm this.
There were no further details on what happened.
Ullrich will be questioned by a judge later on Saturday.
The former cyclist is known for being the only German to have won the Tour de France in 1997.
He also won Olympic gold in Sydney in 2000.
But he was then embroiled in doping allegations and excluded from the 2006 Tour de France over his links to the Operation Puerto scandal that centred on disgraced doctor Eufemiano Fuentes, who gave performance-enhancing blood transfusions to top cyclists.
He finally came clean in 2013 about his doping past.