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The showbiz patriarch - the father of Lindsay Lohan - is accused of getting into an argument that turned physical with his unnamed girlfriend, leading to visible marks on her.
A report was filed with the Los Angeles County Sheriff's Department between 21:30 and 22:00 on Monday and 50-year-old Michael was found by police and arrested.
Lohan is currently taking part in the TV show Dr Drew's Celebrity Rehab for anger management issues.
According to website TMZ, he was taken to a hospital for an unrelated medical condition before he was taken to the Sheriff's office.
Earlier in March Lohan's ex-girlfriend Kate Major accused him of punching a woman in the face.
All hell broke loose
Major claimed "all hell broke loose" when she refused to take part in a celebrity rehabilitation session after finding out he had been lying to her.
Kate added: "I found out all the lies that have been going on with myself, with his friends and with his family in the past few months.
"I still agreed to go to therapy though and that's when all hell broke loose. When I turned up at the centre I found out Michael had lied to me about numerous things, including other women."
After chasing her and her friend, Kate claims she was left terrified when he punched her friend and broke her bracelet.
She said: "Michael ripped a bracelet off my hand and then punched my girlfriend in the face - it was all caught on camera. I was very emotional, and I was very, very scared."
