The 51-year-old fighter was arrested around 1 a.m. Monday at their Hidden Hills home and was released later that morning on $20,000 bail.
Los Angeles County sheriff's deputies had been called to the home on a report of a domestic disturbance.
Booking documents indicate he is facing a misdemeanor charge.
Liddell released a statement saying he was assaulted by his wife, but volunteered to go with the deputies instead of them arresting her.
"I was the victim of the incident last night at our family home, as details of the case will reveal," Liddell said in a statement. "The deputies informed me that my wife would be arrested, as I did not respond to her assault while I sustained bruising and lacerations. I volunteered to go in her place."
Liddell is due in court on Wednesday.
Liddell was one of the most popular and successful UFC stars of the 2000s, and was inducted into the sport's Hall of Fame in 2009. He also has made more than two dozen appearances in film and television productions.