The incident happened in the parking lot of the laundromat in the area of W. Olive Drive and R Street some time before 7.30 pm on Saturday.
Police say 30-year-old Paul Rodriguez approached the teenager, grabbed her by the forearm and dragged her between two parked vehicles.
The girl's parents were about 20 yards away. When she cried out for help, the girl's father and another man confronted Rodriguez, who let go of the girl and fled the area.
Officers tracked Rodriguez down and arrested him for allegedly kidnapping and annoying/molesting a child. He was booked into the Merced County Jail.
The girl was not injured.
Police say Rodriguez is a transient.
They are asking anyone with information about the incident to contact Officer Ramon Ayala at (209) 385-6905 or by email at ayalar@cityofmerced.org.