It follows an incident during the annual Apprentice Boys of Derry parade.
Police confirmed the man was arrested following a report of an “altercation” in the Ferrquay Street area.
He is currently in police custody at Strand Road PSNI station being questioned over a public order breach.
At Shipquay Street, in the city centre, members of the dissident republican group, Saoradh, held a protest and put a banner across the street.
Up to ten thousand members of the ABOD and scores of bands are marching through the city celebrating the ending of the Siege of Derry in August 1689.
The parade is expected finish around 5 pm.