He was arrested at the Railways Club in Nairobi on Friday by Flying Squad officers.
The politician was taken to Nairobi police headquarters for interrogation.
Mr Aladwa was arrested a day after Director of Public Prosecutions Keriako Tobiko directed the police to probe him over the remarks recorded in a video clip that has been reproduced and widely circulated on social media.
Mr Tobiko directed Director of Criminal Investigations Ndegwa Muhoro to “conduct a speedy investigation into the offensive utterances and forward the file with the result of the inquiry to this office for appropriate action”.
Last Friday, the National Cohesion and Integration Commission (NCIC) said it had initiated investigations into the statements purportedly made by Mr Aladwa.
“We, however, have not received an official clip as stipulated by the Evidence Act. We are still relying on the clips that are available online, for our investigation,” said NCIC Secretary Hassan Mohammed.
Kenyans took to social media to express their disappointment at the statements made by Mr Aladwa through the hashtag #ArrestAladwa.