Attorney Michael Avenatti said his client was arrested in Columbus Ohio for "allegedly allowing a customer to touch her while on stage in a non sexual manner."
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He said her act was the same she has performed at nearly 100 strip clubs across the nation. She was appearing at a club called Sirens.
Avenatti called the arrest politically motivated.
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"This was a setup & politically motivated. It reeks of desperation. We will fight all bogus charges. #Basta," Avenatti wrote on Twitter.
He said he expects her to be released on bail shortly and she will be charged with a misdemeanor for allowing touching.
Daniels has been engaged in a legal battle against Trump and his attorney over a nondisclosure agreement she says she signed before the 2016 election over her alleged sexual encounter with Trump. She says Trump's attorney Michael Cohen paid her $130,000 as part of the agreement.
Daniels is suing Trump and his attorney, Michael Cohen, in federal court in Los Angeles in hopes of invalidating the agreement she signed before the 2016 presidential election. She claims the document is invalid because Trump never signed it.
Through White House officials, Trump has denied the affair.