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India's Home Minister P Chidambaram said the detentions were because protesters had not obeyed police conditions for the demonstration.
"Nowhere in the world are protests allowed without conditions," he said.
"We are not prohibiting a peaceful democratic protest - we are trying to find a reasonable set of conditions under which protests can take place."
Mr Hazare says India's proposed anti-corruption ombudsman should be able to investigate any official - including the prime minister and judges.
Correspondents say he has presented an increasing challenge for the Indian government on corruption in Asia's third largest economy, where a series of recent high-profile scandals have tarnished the government's image.
Plainclothes police As news of Mr Hazare's arrest spread, his supporters came out on the streets of many Indian cities in protest. Those detained were arrested at different places in Delhi, with most of them being taken to a stadium in the city.
Mr Hazare, 74, had pledged to go on hunger strike in the capital, Delhi, on Tuesday despite police denying him permission to fast for more than three days.
Plainclothes police officers picked him up from a house in Delhi and drove him away in an unmarked car, fellow activist Akhil Gogoi told the AFP news agency. Police later said he had been held for allegedly breaching the peace.
Mr Hazare is thought to be held in a government facility. His supporters plan to appeal to the Supreme Court against his detention.
India's Home Secretary RK Singh said Mr Hazare had been detained because he said he "intended to defy prohibitory orders" and go on fast at a park in Delhi.
The police laid down six conditions for the fast to take place, which included the following: the fast should be limited to three days; no more than 400 to 500 people are allowed to gather, and there is parking for a certain number of vehicles.
'Corruption culture' Mr Hazare has called the proposed anti-corruption legislation a "cruel joke" and has described the fight against corruption as the "second war of independence". He said the movement would not stop with his arrest.
Lawyer Prashant Bhushan, a prominent supporter of Mr Hazare, said his detention proved that the government was "dictatorial and not heeding to the democratic rights of the people".
Several other prominent supporters of Mr Hazare were also detained.
On Monday, Indian Prime Minister Manmohan Singh said hunger strikes by campaigners would not help to tackle corruption.
Mr Hazare says the proposed anti-corruption ombudsman should be able to investigate any official - including the prime minister and judges.
India has recently been hit by a string of high-profile corruption scandals, including a multibillion dollar alleged telecoms scam, alleged financial malpractices in connection with the Delhi 2010 Commonwealth Games and allegations that houses for war widows were diverted to civil servants.
Critics of the government say the scandals point to a pervasive culture of corruption in Mr Singh's administration.
A recent survey said corruption in India cost billions of dollars and threatened to derail growth.
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