Father Antonio Rodriguez is known in the country for his work on a gang truce which had cut the murder rate dramatically.
He's accused of having ties to a gang leader behind bars and was stopped by detectives as he drive home early on Wednesday.
The priest helps help reintegrate former gang members to society by running job training workshops at the prison.
It's thought he'll be held for questioning for 72 hours.
His detaining has been questioned by the El Salvador president.
Sanchez Ceren praised the priest for his work with gang members and said authorities must have a "good explanation" for questioning Fr Antonio.